Bulls shopping for a rally at Dick's
David Russell | [email protected]
Dick's Sporting Goods has pulled back to long-term lows, and the bulls are piling in.
optionMONSTER's Heat Seeker monitoring program detected the purchase of more than 7,000 September 43 calls, most of which priced for $1.15 to $1.40. Volume was almost 3 times previous open interest at the strike, so new money was put to work on the long side.
Calls lock in the price where investors can the specialty retailer, letting them cheaply profit from a rally. They can also generate significant leverage if shares move in the right direction. (See our Education
DKS rose 1.43 percent to $42.50 on Friday, but is down 27 percent so far this year. Most of that drop came after earnings and revenue missed expectations on May 20. Despite the selling, shares are now back to the same price range where they peaked in 2011. Last week's buyers apparently think they're ready to bounce. researchLAB also shows retailers and consumer-discretionary stocks outperforming the broader market recently.
Overall option volume was 9 times greater than average in the session, with calls accounting for more than 780 percent of the total.