Call Volume Spikes on Reliant Energy, Inc.

The company hasn't made any major headlines since its Nov. 5 earnings report, but nevertheless, Reliant Energy, Inc. (RRI) racked up three times its usual daily call volume on Monday. During the course of the session, traders on the International Securities Exchange (ISE) bought to open 5,715 calls on RRI, compared to just one lonely put.

The day's most active call was the December 5 strike, where 7,679 contracts changed hands. Implied volatility rose 5.7% as a result, and open interest jumped overnight from 6,800 contracts to 11,764 contracts -- confirming that new long calls were added here yesterday. With RRI trading at $5.19 at last check, these back-month calls are right at the money.

Monday's bias toward bullish bets over their bearish counterparts was part of a growing trend for RRI, which now sports a 10-day ISE call/put volume ratio of 19.73. This ratio ranks higher than 67.1% of other such readings taken during the past year, suggesting that calls have been more popular than usual in recent weeks.

Oddly enough, traders are snapping up calls as RRI endures a technical breakdown on the charts. Currently, the shares are poised to finish a third consecutive week below former support at their 10-week and 20-week moving averages.

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