NEW YORK -- A large option trade is betting that IMAX ( IMAX) will reach new highs by next spring.
OptionMonster's Heat Seeker system shows that 22,562 December 30 calls were sold for 90 cents while more than 30,000 March 33 calls were bought for 90 cents and 95 cents on Tuesday. Volume was below previous open interest in the 30s but above it in the 33s, indicating that a long position was rolled forward.
The trader is closing the December calls, which are now in the money, and opening a larger position at a higher strike three months later. The new long calls, which can profit from a rally for much less cost than buying stock directly, are looking for shares to rise above $33 by expiration in mid-March.
IMAX rose 0.56% to $30.39 and is pushing against multi-year highs from last November. The stock gapped higher on Nov. 10 after the much-anticipated film "Interstellar" debuted in the company's high-tech theaters. Management has also announced deals to screen movies in China and Japan in recent days.
Total option volume in the name topped 57,000 Tuesday, 37 times its daily average for the last month. Only 40 of those contracts were puts, a reflection of the session's bullish sentiment.
-- Written by By Mike Yamamoto of OptionMonster
Yamamoto has no positions in IMAX.