Market News

November 23, 2016  Wed 12:44 PM CT

Traders are looking for XPO Logistics to continue rallying through early next year.

OptionMonster's monitoring program detected the purchase of more than 5,200 February 48 calls for $2 to $2.35 today. There was no open interest in the strike before the trades appeared, showing that these are new positions.

Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)

XPO is up 6.56 percent to $45.35 in afternoon trading and has jumped 24 percent in the last month. The transportation-logistics company reported bullish quarterly results on Nov. 2 and is expected to release its next earnings numbers after the close on Feb. 22.

Overall option volume in the name is 3 times greater than average so far today. Calls outnumber puts by a bullish 13-to-1 ratio.

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