Traders are betting that GT Advanced Technologies will rally hard in the next month.
More than 3,800 July 22 calls traded in a strong buying pattern yesterday, mostly going for $0.25 to $0.30, according to optionMONSTER's Heat Seeker tracking system. Previous interest in the strike was just 743 contracts, indicating that new positions were opened.
These long calls lock in the price where the stock can be purchased through mid-July no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, providing potentially significant leverage, but the contracts will expire worthless if shares remain below $22. (See our Education section)
GTAT rose 1.8 percent yesterday to close at $18.63. Shares have been trending higher since bouncing off their 100-day moving average in mid-May.
The company makes solar-energy products but has diversified into sapphire touchscreens and other technologies with high growth potential. Its stock is up more than 400 percent in the last 12 months.
Total option volume in the name topped 17,000 contracts yesterday, double its full-session average for the last month. Overall calls outpaced puts by more than 3 to 1.
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