One big investor is giving KapStone Paper and Packaging time to rally.
optionMONSTER's Heat Seeker monitoring program on Friday detected the purchase of 7,500 May 35 calls for $1.75 and the sale of an equal number of May 40 calls for $0.50. Some 7,500 February 30 calls were also sold for $2, but volume was below the previous open interest in that strike.
It appears that he or she came into the session long the February contracts and rolled the position to a bullish vertical spread in May. Making the adjustment produced a credit of $0.75 and will let the trader collect $5 more if the stock closes at $40 or higher by expiration in mid-spring. (See our Education section)
KS was down a penny to $29.89 on Friday. It more than tripled between mid-2012 and early 2014 but has been consolidating in a range since. The option action was noteworthy because it raised the trader's price target and added three months of long exposure.
Total option volume in the name was 212 times greater than average in the session, with not a single put trading all day.
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