Bulls Hit the Road With C.H. Robinson

By David Russell of OptionMonster

 

NEW YORK -- C.H. Robinson Worldwide (CHRW) has been rallying back from long-term lows, and the bulls keep piling in.

OptionMonster's tracking programs detected heavy volume in the July 62.50 calls, with large blocks trading for 60 cents to 65 cents. Volume surpassed 9,000 contracts, more than triple the previous open interest, which indicates that new positions were initiated. More than 2,400 August 65 calls were also bought for 70 cents.

Long calls lock in the price where investors can buy a stock, letting them cheaply position for a rally with limited risk. The contracts can also generate significant leverage if shares move in the right direction, but they can quickly lose value if the stock drops.

C.H. Robinson's shares slipped 0.15% Thursday to close at $61.82. The freight and logistics company traded all the way down to $50 in March, its lowest price since mid-2010, but has been rallying sharply since then along with other transportation stocks. Its last earnings report also beat expectations as management raised prices on a per-mile basis.

Total option volume in the name was 12 times greater than average in the session, with calls outnumbering puts by more than 174 to 1.

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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