Will NRG Energy mount a comeback?

A large position is looking a rebound in NRG Energy by the end of the year.

optionMONSTER's monitoring program shows that 5,000 December 12 calls were purchased for $1.65 and $1.70 at the same second yesterday. This is clearly a new position, as open interest in the strike was a mere 5 contracts before the trade occurred.

Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)

NRG is up 0.48 percent to $12.55 in morning trading but is down 21 percent in the last three months. The power company is expected to report earnings in pre-market hours on Nov. 3.

Overall option volume in the name is twice its daily average so far today. Calls outnumber puts by a bullish 112-to-1 ratio.



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