By Mike Yamamoto of OptionMonster
Traders are looking for a bounce in General Cable (BGC), which plunged after its last earnings report in early November.
More than 6,500 February 30 calls traded in a heavy buying pattern Monday for $1.10 to $1.55, according to OptionMonster's tracking systems. Open interest in the strike was just 484 contracts before the trades appeared, indicating that these are new positions.
These calls lock in the price where traders can purchase the stock through mid-February no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, but the contracts will expire worthless if shares remain below $30.
General Cable shares rose 1.82% Monday to close at $29.16. The maker of cable products and fiber-optic wire gapped down from above $34 after its quarterly results on Nov. 5 and has been trading sideways since.
Total option volume in the name reached 8,400 contracts Monday, compared with a daily average of just 290 for the last month. Overall calls outnumbered puts by 6 to 1, a reflection of the session's bullish sentiment.
Yamamoto has no positions in BGC.