A trader is looking for Dana Holdings to rebound in coming weeks.
optionMONSTER's Heat Seeker system shows that 1,335 December 19 calls were bought for $0.90 to $1.10 in about 30 seconds on Wednesday afternoon. Open interest in the strike was just 659 contracts before the trade appeared, indicating that it is a new position.
These long calls , which lock in the price where the stock can be purchased, are looking for DAN to rally by expiration in mid-December. But these contracts, which will track the share price closely because they are in the money , will quickly lose value if the stock doesn't rise soon.
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DAN rose 1.61 percent on Wednesday to close at $19.51. The auto-parts maker gapped down from above $22 after missing quarterly numbers and issuing weak guidance on Oct. 29, and it has been trading sideways at current levels ever since.
Total option volume in Dana was 75 percent higher than its daily average for the last month. Overall calls outnumbered puts by nearly 5 to 1 on Wednesday, a reflection of the session's bullish bias.
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