By David Russell of OptionMonster
NEW YORK -- Kimberly-Clark (KMB) has traded in a tight range, and now the bulls are looking for a quick acceleration higher.(KMB)
OptionMonster's tracking systems on Friday detected the purchase of 2,200 Weekly 112 calls, which had no open interest when the session began. The initial buyers paid mostly 40 cents and 45 cents for those contracts, which expire at the end of this week, but the premiums ratcheted higher as the shares rose.
Long calls lock in the price where investors can buy a stock, which lets them benefit from a rally without the expense of owning shares. Because of their comparatively low cost, the contracts can generate significant leverage from even a modest gain. And that's exactly what happened on Friday because those Weekly 112s almost doubled to 75 cents by the close of trading.
Kimberly-Clark shares rose 0.98% to $112.35 on Friday. The stock was parked around $110 since February but rose at the end of last week while holding above last year's highs.
Overall option volume in the name was more than six times greater than average on Friday, with calls accounting for bullish 84% of the total.
Russell has no positions in KMB.