Trader hopes to hit jackpot in IGT
One trader is looking for International Game Technology to rebound by Thanksgiving.
optionMONSTER's Heat Seeker system shows that 1,500 November 20 calls were bought for $0.75 in less than 2 minutes yesterday. This is clearly a new position, as the volume was well above the strike's open interest of 279 contracts before the trade appeared.
These long calls lock in the price where traders can buy the stock for the next seven weeks no matter how far it might rise. The calls could be sold earlier at a profit if premiums climb with a rally before then, but the contracts will expire worthless if shares remain below the $20 strike price through mid-November. (See our Education section)
IGT, which makes casino-game machines, fell 1.56 percent yesterday to close at $18.93. The stock had broken out of a tight range along with other casino names early this month but hit resistance at the $21 level and then fell sharply on Friday with a downgrade from Deutsche Bank to "hold" from "buy."
Total option volume in IGT topped 6,000 contracts yesterday, about 50 percent higher than its daily average for the last month. Overall calls outnumbered puts by more than 8 to 1.
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