Markets may be dropping fast this morning, but that isn’t stopping the “smart” money from making money with their unusual call buys. The good news is with the market dropping fast, you may be able to get in on these insider trades at a lower price than the original trade. Two unusual call buys that caught our eye this morning are in Roadrunner Transportation Systems Inc. (RRTS), and Estee Lauder Companies (EL).
Firstly, one trader made a very unusual call buy in Roadrunner Transportation Systems (RRTS), buying just 800 of the August $30 calls for 40 cents. That’s a transaction value of only $32,000, but it’s a strange one. We’re guessing an employee who knows something we don’t is trying to make a little extra cash and hoping no one (SEC) will notice.
Roadrunner Transportation Systems (RRTS) announces earnings on July 30 at 4pm. So this call buy has earnings leak written all over it.
RRTS is down 53 cents today, at $27.33, so you may be able to snag these same calls for a little less than this trader.
RRTS is a transportation and logistics company providing customized shipping (intermodal), less than truckload, etc services. Not an exciting business, and not a big business, but that’s what makes this call buy so interesting to us.
RRTS is currently rated a buy with a price target of almost $32.00, so it’s got some room to run. Maybe a positive earnings report will help this trader bank some serious coin. We like it, and we’re in for a copy cat trade.
Estee Lauder Companies (EL) also saw some unusual call buying in the August calls. One trader thinks there’s some room for growth, buying 2,410 August $80 calls at the ask, around 50 cents. The stock is only trading at $75.33 today, down 58 cents, and still heading lower today.
We’re scratching our heads on this call buy, valued at over $120,000. Estee Lauder doesn’t report earnings until August 15. It could still be an earnings play, but given today’s market weakness this buy doesn’t make a lot of sense.
EL is rated OVERWEIGHT, and has an average price target of $82.79. This may in fact not be a play on leaked earnings, and rather a play on a leaked price target increase by a major analyst.
Either way, this one doesn’t really have our interest, which means it’ll likely explode much higher, soon.