Crown Castle has been consolidating all year, and now the bulls are looking for a rally into next spring.
optionMONSTER's Heat Seeker monitoring program detected the purchase of 2,000 April 85 calls for $1.36 and the sale of an equal number of January 65 puts for $0.56. That translates into a debit of just $0.80.
Selling those puts obligates the investor to buy the wireless-tower stock if it falls below $65 by the third Friday of 2014, while owning the call s gives him or her the right to get long for $85 by April expiration three months later. Combining the two strategies is highly bullish, resulting in a low-cost, highly leveraged position.
The $0.80 outlay controls the equivalent of 0.29 CCI share. The stock closed at $75.19, down 1.1 percent, so the trader is paying a tiny fraction of the actual cost. (See our Education section for more on how to craft positions for a wide range of market scenarios.)
CCI roughly doubled between 2009 and 2011, then moved sideways for the next year. It doubled again through early 2013, so Friday's strategy represents a bet that the longer term-uptrend will resume. The broader wireless-tower group has started outperforming the broader market in the last three months, according to our proprietary r esearchLAB analytics tool.
Overall option volume was more than 4 times the daily average, with that bullish combination accounting for two-thirds of the total.
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