"(The following is an example of notable trading cited on optionMONSTER's InsideOptions Pro service yesterday.)
Rite Aid is bucking long-term resistance, and the bulls expect a breakout.
optionMONSTER's Heat Seeker system yesterday detected the purchase of 28,500 Weekly 9 calls expiring Aug. 14 for $0.17 to $0.22. Open interest stood at just 1,208 contracts when the session began, which indicates that new money was put to work.
Long calls lock in the price where investors can buy a stock, letting them profit from a rally while risking only a small amount of capital. The relatively cheap cost of the options can also generate significant leverage on a percentage basis if shares move higher. (See our Education section)
RAD ended the session up 2.83 percent to $9.08, its best closing price in 14 years. The pharmacy stock has been ripping higher since late 2012, when it bottomed under $1. Our premium subscribers have made money plenty of times along the way, most recently in May .
About 6,000 of the August 9.50 calls were also bought for $0.11. Earnings are estimated for mid-September, well after yesterday's contracts expire.
Total option volume was 6 times greater than average in the session, with calls outnumbering puts by more than 20 to 1."
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