OptionMonster's tracking systems detected the purchase of 6,000 July 26 calls Monday, most of which priced for 40 cents, well above the previous open interest of just 628 contracts. There was also heavy volume in the July 25 calls.
Long calls lock in the price where a stock can be purchased, letting investors cheaply position for a rally. They can generate significant leverage if shares move in the right direction but can also quickly lose value on a pullback.
CenterPoint rose 0.71% to $25.54 on Monday and has been breaking out of a price triangle on its chart in recent sessions. Traders already more than doubled their money in the July 25 calls two weeks ago.Other names in the sector such as Consolidated Edison (ED), Southern (SO), and NextEra Energy (NEE) have also been active in the last month as investors return to utilities. Monday's total option volume in CNP was triple its daily average for the last month, with overall calls outnumbering puts by more than 300 to 1. Russell is long SO.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts