OptionMonster's tracking systems show that 11,500 January 32 calls were purchased mostly for $3.50 and $3.60 Monday. Volume was more than 50 times the previous open interest in the strike, indicating that new money was put to work.
These long calls lock in the price where the stock can be purchased through mid-January no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, providing potentially significant leverage, but the contracts will lose value if shares stall or drop.
NRG fell 2.49% to $33.69 on Monday but is up more than 20% in the last six months. Monday's upside option action followed call buying in the January 35 contracts last Wednesday.
More than 16,500 options traded in the power and energy name Monday, compared to a daily average of 2,300 for the last month. Calls accounted for a highly bullish 94% of the total.
Yamamoto has no positions in NRG.