Bulls Pile Into C.H. Robinson

By David Russell, reporter at OptionMonster

NEW YORK -- C.H. Robinson Worldwide ( CHRW) pulled back to support Wednesday, and the bulls piled in.

OptionMonster's trade scanners detected heavy buying in the May 60 calls, with a block of 5,000 contracts purchased for $1.20 shortly after the open. Those options lock in the price where investors can buy shares, so they have the potential to generate significant leverage from even a small move in the stock price.

That's exactly what happened in Wednesday's session. The logistics and shipping company pushed higher and those calls ratcheted up in price, fetching as much as $1.76 in the afternoon. That's a gain of more than 40% from a low-single digit move in the share price.

The stock ended the session up 2.8% to $57.19. The move came after the shares retreated to the same level where they bounced in September. There was also a strong rally in the broader transportation sector, which also saw bullish option activity in Expeditors International of Washington ( EXPD) and U.S. Airways ( LCC).

More than 5,500 of the May 60 calls changed hands in C.H. Robinson Wednesday, more than five times the strike's open interest before Wednesday's trading began. Overall option volume in name was equally impressive at more than 16,000 contracts, with calls accounting for a bullish 90% of the total.

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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