Bulls Look to Toast Gains in Beam

By Pete Najarian, co-founder of OptionMonster

NEW YORK -- Beam ( BEAM) has been performing well this year, and on Tuesday the bulls stepped in.

The June calls were especially active as investors looked the stock to rise into late spring. The June 62.50s mostly traded 55 cents to 90 cents, with more than 5,208 changing hands against open interest of just 20 contracts. The June 65 calls also traded more than 2,800 times.

Calls lock in the price investors must pay for shares in the company, which sells branded distilled whiskeys and other spirits. These contracts can appreciate in a hurry if the stock makes even a small move.

For example, those June 62.50 calls ended Tuesday's session at $1.45 -- almost triple their opening value. The June 65s gained even more on a percentage basis, shooting up from 20 cents to $1.12.

Beam shares rose 2.71% to $57.51 Tuesday. The company recently reaffirmed its earnings target for 2012, driven partly by sustained market-share gains in its industry-leading bourbon portfolio and strong initial reception for the latest innovations. Another catalyst was takeover chatter in the British press.

Najarian has no positions in BEAM.
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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