KKR Pullback Brings Out Buyers

By David Russell, reporter at OptionMonster

NEW YORK -- Private-equity firm KKR ( KKR) has been pulling back, and Thursday the bulls stepped in.

OptionMonster's tracking systems detected the purchase of some 6,200 January 21 calls, most of which priced for 75 cents. The volume was more than 22 times the previous open interest in the strike, indicating that new money was put to work.

These calls lock in the price where investors can buy shares and can provide significant leverage in a rally. For instance, a 25% move in the stock by expiration in mid-January would drive up the calls' premiums by more than 150%.

KKR rose 0.71% to $18.43 Thursday. It peaked above $21 in April before falling along with the rest of the market and is now trying to bounce around the same $18 level that presented resistance in February.

Total option volume in the name was 5 times greater than average in the session, with calls outnumbering puts by 15 to 1.

Russell has no positions in KKR.
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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