Earnings season is in full swing, and so are the options traders. There’s been a few notable, unusual call buys this morning, though you have to keep in mind these stocks are reporting earnings within the next week, so risk is high. Three big trades that caught our eye this morning include Crocs Inc. (CROX), Kosmos Energy (KOS), and Graphics Packaging Holding (GPK).
Crocs Inc. (CROX) saw a trader come in and snap up 4,852 August $15 calls this morning, just the day BEFORE the company reports earnings. They report Tuesday morning at 9am. Our guess is earnings are going to be fairly spectacular given this big “bet”. That little bet is worth over $315,000. The copy cat traders are already on this, and we’re thinking its worth a small bet too, though much smaller than this big guy.
Crocs is trading down 5 cents currently, though was a chunk lower before rebounding around the time of the call buying. It’s currently at $14.81.
Analysts are expecting big things with an overweight rating on CROX, with a price target of $17.31. The estimate for this quarter is 31 cents per share.
Kosmos Energy (KOS): one trader is fired up over KOS as they purchased 1,000 January $10 calls this morning, paying $1.05 at the ask. That’s a tidy bet of $105,000 in a not so widely followed energy stock.
Kosmos Energy (KOS) is currently unchanged on the day, at $10.08, though it has traded as low as $10.03 and is off todays earlier high of $10.19. Volume in the common is average at best.
This could be an earnings leak play, given that the company is scheduled to report on August 4, 2014. It also could be a ratings upgrade leak as the company doesn’t currently have any coverage. We like this trade as it’s on a company based in Bermuda, and well, things get a little sketchy in Bermuda sometimes.
Graphics Packaging Holding (GPK): This is an unusual trade in a little known company, but again risk is high with earnings scheduled to be announced on July 24. We tend to avoid these earnings plays, they are just a coin toss really.
A trader bought 1,100 December $12.50 calls at 55 cents a piece, for a total bet value of just $60,500. It’s a boring company in a boring industry, which ironically makes us a little more interested in this unusual opening call buy. Call us crazy, but we’re inclined to go in for few.
GPK is down 20 cents on the day to $11.60 which also makes the call buy all the more curious and interesting.