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August 22, 2012  Wed 4:44 AM CT

KFN: SEE CHART GET CHAIN FIND STRATEGIES

KKR Financial has been performing well, and yesterday the bulls looked for the strength to continue.

optionMONSTER's tracking programs showed a steady stream of buyers in the January 10 calls, with blocks pricing for $0.15 and $0.25. Volumes weren't off the charts, but it definitely stood out with more than 5,700 trading against previous positioning of just 638 contracts.

Those calls lock in the price investors must pay to buy shares on the specialty finance company. They can generate some nice leverage in the event of a rally but will also expire worthless if the stock doesn't move.

KFN ended yesterday higher by 0.22 percent at $9.17. The company has an expertise in a range of asset classes, primarily investing in financial assets, and remains below under book value. That may be why we've recently seen inside buying in the shares.

Calls outnumbered puts by 6,200 to about 30, so it was definitely a bullish session! An even 6,300 contracts traded versus average volumes of just 350.

DISCLOSURE: I OWN KFN SHARES

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