Buyers climb aboard C.H. Robinson
C.H. Robinson Worldwide pulled back to support yesterday, and the bulls piled in.
optionMONSTER's Heat Seeker system detected heavy buying in the May 60 calls, with a block of 5,000 contracts purchased for $1.20 shortly after the open. Those options lock in the price where investors can buy shares, so they have the potential to generate significant leverage from even a small move in the stock price.
That's exactly what happened in yesterday's session. The logistics and shipping company pushed higher and those calls ratcheted up in price, fetching as much as $1.76 in the afternoon. That's a gain of more than 40 percent from a low-single digit move in the share price. (See our Education section)
CHRW ended the session up 2.8 percent to $57.19. The move came after the shares retreated to the same level where they bounced in September. There was also a strong rally in the broader transportation sector, which also saw bullish option activity in Expeditors International of Washington and U.S. Airways .
More than 5,500 of the May 60 calls changed hands in C.H. Robinson yesterday, more than 5 times the strike's open interest before yesterday's trading began. Overall option volume in name was equally impressive at more than 16,000 contracts, with calls accounting for more than 90 percent of the total.
(A version of this post appeared on InsideOptions Pro yesterday.)
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