Traders are betting that CSX will rally after it reports earnings in two weeks.
optionMONSTER's Heat Seeker system found heavy buying in the April 34 calls today, with more than 6,600 trading for $0.41 to $0.54. Volume is well above the strike's previous open interest of 2,644 contracts, indicating that new positions were established.
These long calls lock in the price where the stock can be purchased, providing leverage to the underlying shares. But the contracts can quickly lose value if the stock stalls or pulls back. (See our Education section)
CSX is up 0.62 percent to $33.33 this morning as it tries to hold support near its 200-day moving average. The railroad operator rebounded sharply from the $33 level in the first half of February but hit resistance at $37 and gave up those gains as the transportation sector weakened.
The company is scheduled to announce first-quarter results after the market closes on April 14.
Today's overall option volume in CSX is already more than double its full-session average for the last month. Total calls are outpacing puts by about 5 to 1.
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