Tuesday, November 10, 2009

Call Volume Spikes on Reliant Energy, Inc. (RRI)

From Schaeffer's Research:
The company hasn't made any major headlines since its Nov. 5 earnings report, but nevertheless, Reliant Energy, Inc. (RRI) racked up three times its usual daily call volume on Monday. During the course of the session, traders on the International Securities Exchange (ISE) bought to open 5,715 calls on RRI, compared to just one lonely put.

RRI price chartThe day's most active call was the December 5 strike, where 7,679 contracts changed hands. Implied volatility rose 5.7% as a result, and open interest jumped overnight from 6,800 contracts to 11,764 contracts -- confirming that new long calls were added here yesterday. With RRI trading at $5.19 at last check, these back-month calls are right at the money.

Monday's bias toward bullish bets over their bearish counterparts was part of a growing trend for RRI, which now sports a 10-day ISE call/put volume ratio of 19.73....MORE