Call Option Winners: Rock-Tenn (RKT) and LRR Energy (LRE)

It didn’t take long for two unusual options trades to pay off for the “smart” money traders.  Of course by “smart” we mean “insiders” or their friends and family, kinda like the Framily Plan from Sprint.  The two big winners from yesterdays buys were in Rock-Tenn Company (RKT) and LRR Energy LP (LRE).

When we let you know about the small but unusual call buyer in Rock-Tenn (RKT) here, we had missed the boat a little and wanted to wait for a pull back.  Well, that didn’t work out so well for us.  However it worked out just fine for the original trader.

That trader bought just 850 of the September $100 RKT calls, paying $2.05.  Well, those options are now trading $6.10 bid, $7.50 ask.  RKT hit a high earlier this afternoon of $105.66, but has since pulled back some, to $103.52.

It looks like that original trader may have locked in his profits based on the volumes traded in the September 100’s contract.  Looks like a nice profit of about $4.50 per contract.  That makes for a one day profit of approximately $382,500, on an investment of just $174,000.  Not a bad day’s work.

rock-tenn-company-logo

The second winner that likely still has some legs is in LRR Energy LP (LRE), which we wrote about yesterday around 2pm.  A trader had purchased 1,646 February 20 calls in LRE around that time.  The trader paid around 17 cents for those calls.

LRE is currently up 53 cents to $19.41 on the day so far, which is one cent off the high of the day.  It looks like this could go higher still.  Those Feb 20 calls are currently bidding 30 cents to ask of 35 cents, last traded at 30 cents.  That makes for a very quick profit of 13 cents, or 75%.

That LRR Energy LP (LRE) trader, assuming they haven’t sold yet, is holding on to a profit of $21,398, on an initial investment of just $28,000.

Not the biggest gain dollar wise, but we’ll take 75% any day of the week, and often do following these insider call buys.

More to come, as they come in.  Happy options hunting.