Options Trading News

August 11, 2014  Mon 3:27 AM CT

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 section.)

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.
Share this article with your friends

Related Stories


Late upside play in Dick's Sporting

September 16, 2015

The sporting-goods chain gapped up after beating estimates and raising guidance on Aug. 18, but shares began to fall sharply two days later as the market plunged.

Invest Like a Monster - San Antonio: October 9-10

Premium Services

Archived Webinar

Education & Strategy

The covered call and unhedged risk

I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

View more education articles »