NEW YORK -- At least one trader is looking for Rockwood (ROC) to rally by mid-summer.
OptionMonster's tracking systems detected the purchase of more than 3,000 August 72.50 calls for $4.50 Monday. This is fresh buying, as there was no open interest in the strike before the trade appeared.
Such long calls lock in the price where a stock can be bought, letting investors cheaply position for a rally. That can provide significant leverage while limiting the amount of capital at risk, but the options will expire worthless if they stall or decline.
Rockwood shares fell 4.32% to $71.02 Monday. The chemical company, which provides lithium used in batteries and other products, has been pulling back since reaching an all-time high of $82 the day after its last earnings report on March 3. The stock appeared to be finding technical support before it got hammered in the broader market's recent selloff.
Overall option volume in Rockwood Monday was triple its daily average for the last month. Calls accounted for more than two-thirds of the total.
As insurgencies proliferate, investors and targets are fishing in the same small pool of candidates. Experienced executives are the ideal recruits -- and companies may have an advantage over activists.
Huntsman (HUN) stock is up after the chemical company announced that the European Commission approved its acquisition of the performance additives and titanium dioxide business from Rockwood Holdings (ROC).