Eagle Materials has been in rally mode for the last month, and traders want to give it more room to fly.
optionMONSTER’s Heat Seeker monitoring program detected the purchase of 1,000 April 95 calls for $1.55 and the sale of an equal number of July 105 calls for $1.35. Volume was below open interest at the lower strike, so it appears a short position was rolled forward in time and higher in price.
The investor probably owns shares and sold the April 95s as part of a covered-call strategy. Today’s adjustment raised his or her exit price by $10 and committed them to an additional three months in the trade. Making the move cost $0.20.
— Option Monster