GNC Holdings, the purveyor of diet and nutritional supplements is trading 42.18 up about 4%.? 30 day IV is 30.41, which is right at the lowest level we have seen in two years.
A trader that was likely already long the March 37.5 calls rolled and re-levereged his or her position today on the heels of this earnings rally.? The trader sold 2000 of the GNC Mar 37.5 call collecting 4.6, then bought 8000 of the Mar 42.5 calls for 1.15.?
Effectively the trader put on a call 1 by 4 for even, this allowed the trader to convert his deltas, the Mar 37.5 calls and convert them in Gamma via the Mar 42.5
If GNC continues to run, this trader is going to end up carrying a very large position as it rallies.? This I a classic example of using leverage to get leverage.