$NRG call buyers score again

NRG Energy (NRG) shares have been continuing their rebound from the recent year-to-date low, delivering more handsome profits to well timed option trades.

On May 28, Market Rebellion’s Unusual Activity Service found that 2,700 July $34 calls were bought for $0.85 to $1.00 above open interest of just 311 contracts with shares at $32.14.

Those calls were last marked at $3.50 this afternoon, at least 3.5 times their purchase prices. The stock rose 15.62% in the same time period, illustrating the kind of leverage that can be achieved with options.

This marks the second winning trade in the name to be posted on Market Rebellion this month.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

NRG traded as high as $37.57 earlier in the session but was last lower by 0.38% at $37.16.