Resolute Forest Products Inc (RFP) is a company that owns and operates paper mills in the U.S. and Canada. The company’s stock is currently trading around $16.50 in a 52 week range of $14.73-$21.70. RFP has under performed the market over the past year with shares falling 7.92% over the past 12 months. Despite this relatively weak performance over the past year traders are putting on some very bullish positions in RFP during today’s trading session.
Earlier this morning a trader bought 5,000 RFP Jan 17.5 calls for $0.30 while stock was trading at $16.04. This order represents options volume over 140x the average daily options volume in RFP. Immediately after the calls hit OptionHacker the stock popped higher trading as high as $16.94. Implied volatility also popped after these calls were bought with ATM implied volatility touching new 52 week highs in RFP. As the stock moved higher these calls moved with it trading as high as $0.80 so far making this trade an absolute blowout winner.
Trade: I bought the RFP Jan 17.5 Calls for $0.45
Risk: $45 per 1 lot
Reward: Unlimited
Breakeven: $17.95
I was able to sell most of these calls at $0.75 but will hold a small position through expiration. This was a very fast and very profitable trade.
Regards,
Andrew Keene
KeeneOnTheMarket.com
