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Bulls Climb Aboard C.H. Robinson

By David Russell of OptionMonster
 
NEW YORK -- Shares of C.H. Robinson Worldwide (CHRW) have gone nowhere forever, but Wednesday the bulls looked for the shipping and logistics firm to rally.
 
OptionMonster's tracking systems detected the purchase of more than 5,000 February 57.50 calls for $2.20 to $3.05. The volume was well above previous open interest of 3,101 contracts, indicating that new positions were initiated.
 
These calls lock in the price where a stock can be bought, letting investors cheaply control a move higher and enjoy significant leverage if one occurs. For instance, a 5% stock gain in the next five weeks will double the value of the options.
 
Robinson's shares closed the session up 2.77% at $59.34. The stock has been trapped between $55 and $62 since last February, when it cratered on a poor earnings report. The next quarterly results will be released after the closing bell on Feb. 4.
 
Wednesday's bullish option trades came after the World Bank just raised its global growth forecast for this year and next. That's potentially bullish for a company like CHRW, which helps companies move freight by air and sea.
 
Total option volume in the name was five times greater than average Wednesday. Overall calls outnumbered puts by a bullish 20-to-1 ratio.
 
Russell has no positions in CHRW.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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