Earnings season option plays are still alive and kicking, with a sizeable call buy seen in Resolute Energy Corp (REN) this afternoon.
A trader just bought an even 2,000 December $9.00 calls in Resolute Energy Corp (REN) at the ask, paying 40 cents for the contracts. That makes an earnings play bet worth $80,000. Not huge by any means, but big enough for us to take notice.
Resolute Energy Corp (REN) is currently trading at $7.54, down 23 cents on the day. Which makes this call buy all the more interesting and unusual. REN has a 52 week high of $10.97, and a low of $6.45. It’s trading volume today was slightly higher than average at 670,000 shares so far.
Of course, the most interesting aspect of this larger call buy is the fact that Resolute Energy Corp (REN) is scheduled to announce earnings next week, on August 12th after market close. That, and the fact that this trader tried to be sneaky, buying the December calls instead of the August, makes this one of the more interesting options plays of the day.
The company hasn’t exactly been a beacon of profit, but 12 analysts covering the stock estimate the company will eke out a small profit this quarter and for the year (one penny). The average rating on REN is “overweight” and the average price target is $9.64.
So it seems, this call buyer knows that either earnings are going to beat estimates, or one of the firms is going to upgrade the stock rating and price target, or both.
Either way, we are interested in Resolute Energy Corp (REN) and are jumping on the bandwagon with the December $9 calls.