Traders turned bullish on PG&E late yesterday.
optionMONSTER's Heat Seeker system detected heavy buying in the November 55 calls, with more than 7,000 trading for $0.45 to $0.60 in the last hour of the session. These are clearly new positions, as open interest in the strike was only 395 contracts before the session began.
These long calls lock in the price where the stock can be purchased through mid-November 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 $55. (See our Education section)
PCG rose 0.53 percent to $51.45 yesterday. The California utility, which hit all-time highs above $60 in January, based out below $48 early this month but has been climbing steadily since. The company's next quarterly results are expected in late October, weeks before yesterday's calls expire.
Total option volume in the name yesterday was 63 times its daily average for the last month. Overall calls outnumbered puts by a bullish 17-to-1 ratio.
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