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In the world of stock trading, unusual option activities often signal significant upcoming movements in a stock's price. Recently, we detected notable activity for Vistra Energy (ticker symbol: VST). After thorough analysis, we are prepared to provide our recommendation on whether to go long or short on Vistra Energy based on the latest market data and trading activities.
Recent Unusual Option Activity
On May 28th, we observed unusual option activity for Vistra Energy. Specifically, there was significant trading in the June 21st 95 strike calls, with 4,000 contracts being traded out of an open interest of 6,000. This indicates that traders were closing out their positions to take profits, leaving 2,000 contracts still open.
The following day, we confirmed this data and noticed that traders were rolling their positions to a higher strike price and a further date. For the July 19th options at the 110 strike calls, 5,000 contracts were opened, compared to an initial open interest of only 499. Estimating the trade cost at $640 per option, this activity represents a $3.2 million investment.
Analyzing the Trade
Our analysis of the July 19th 110 strike calls reveals a clearly bullish sentiment. The trades are opening positions, as evidenced by the increase in open interest to 5,000 contracts. Additionally, the profit-loss graph with a positive delta further supports the expectation of a price increase.
Given this bullish outlook, we recommend going long on Vistra Energy. Yesterday's price action, reaching a 52-week high and then pulling back, offers an attractive entry point for long positions.
Related News
Adding to the bullish sentiment, Vistra Energy has recently been in the news for several positive developments:
Expansion in Renewable Energy: Vistra Energy announced plans to expand its renewable energy portfolio significantly. This includes new solar and battery storage projects, aligning with global trends towards cleaner energy sources and potentially boosting investor confidence.
Strong Financial Performance: Vistra's recent quarterly earnings report exceeded analysts' expectations, showing robust revenue growth and strong cash flow. This financial health supports the case for a long position.
Strategic Acquisitions: The company has been actively pursuing strategic acquisitions to enhance its market position and diversify its energy portfolio. These moves are expected to create long-term value for shareholders.
Conclusion
Based on the unusual option activity, our detailed analysis, and the positive news surrounding Vistra Energy, we recommend going long on VST. The current pullback from the recent high provides a favorable entry point for traders looking to capitalize on the anticipated upward movement.
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Disclaimer: Trading stocks and options involves substantial risk and is not suitable for every investor. Please consider your financial situation and consult with a financial advisor before making any investment decisions.
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Sources:
- Vistra Energy's official announcements and financial reports.
- Market analysis and option activity tracking tools.
Take care and have a great day!
Author: FRANKTRADEZ