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December 31, 2013  Tue 5:16 AM CT

MAT: SEE CHART GET CHAIN FIND STRATEGIES
Mattel has been running, and the bulls came back to the toy maker yesterday.

optionMONSTER's Heat Seeker program detected heavy buying in the February 48 calls early for $1.10 to $1.25. Volume mounted at the strike and surpassed 6,400 by the end of the session, dwarfing previous open interest of just 75 contracts.

These long calls lock in the price where a stock can be bought, letting investors cheaply position for a breakout with the shares near their all-time highs from May. The contracts can also generate significant leverage because of their low entry cost but will expire worthless if shares remain below $48 through mid-February. (See our Education section)

MAT rose 1.77 percent to $47.82 yesterday and is up 16 percent since bouncing at key support around $40 in early October. The last earnings report also beat expectations thanks to strong sales of Barbie and Monster High dolls.

While the company hasn't yet announced the date of its next quarterly report, last year's calendar suggests it will occur by early February. So those February 48s could benefit from another strong release.

Overall option volume was 16 times greater than average in the session, with calls accounting for a bullish 90 percent of the total.

(A version of this post appeared on InsideOptions Pro yesterday.)
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