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May 15, 2013  Wed 10:06 AM CT

AVB: SEE CHART GET CHAIN FIND STRATEGIES
The bulls want to find a home in apartment-building owner AvalonBay Communities.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 1,235 June 140 calls for $0.90. Volume was more than 36 previous open interest at the strike, indicating that new money was put to work.

Owning calls locks in the price where investors can buy shares in the real-estate investment trust, which focuses on premium markets in the East Coast and West Coast. Given their low entry cost, they can generate significant leverage from a small gain in the stock price. For instance, a 5 percent move would more than triple the value of the contracts. (See our Education section)

AVB is down 0.39 percent to $136.11 in morning trading and has been fluctuating in a range for the last two years. Yesterday it closed above its 200-day moving average for the first time since September, which could be leading some traders to believe that it's going to keep climbing.

Total option volume is 6 times greater than average in the session, according to the Heat Seeker. Calls outnumber puts by a bullish 41-to-1 ratio.
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Real vs. Synthetic

We now know that there are two ways of creating a call position, a put position, and a stock position. We can simply use the actual real security or we can recreate it synthetically. We can create these positions in both long and short forms and this ability sets up an interesting scenario--an arbitrage!

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