I trade Unusual Options Activity (abnormal volume in calls or puts) because often, these trades result in a stock making a major move.
Today we saw a trader buy over 3,500 ZAYO December $27.50 Calls for $0.35. This order cost almost $100,000. Each contract entitles the option buyer/owner to buy 100 shares of the underlying stock upon expiration. And ZAYO has an ADV (Average Daily Volume) of only 4,870,000 shares.
I like this trade because there have been rumors of takeout of ZAYO.
Though we never know if a trader is buying Calls for Speculation or a hedge against a short stock position, I do think this setup is a good reward to risk setup.
I could not get filled in the December $27.50 Calls, but I was able to buy January $27.50 Calls and got filled at $1.10.
