Options Trading News

January 31, 2013  Thu 5:16 AM CT

The bulls have been targeting Staples recently, and yesterday they were back in the trade.

optionMONSTER's Heat Seeker tracking program detected the purchase of about 33,000 September 15 calls for $0.70 to $0.80. Volume was almost 155 times previous open interest at the strike, indicating that new money was put to work.

Long calls lock in the price where investors can buy shares in the office-supply retailer. That can result in some nice leverage in the event of a continued rally, but they can become worthless if it doesn't move. (See our Education section)

SPLS fell 1.32 percent to $13.48 but is up more than 20 percent in the last month. The stock bottomed around $11 in August, its lowest price since early 2003. Other office retailers have been gaining as well, making them the third-best performing group on optionMONSTER's propriety researchLAB service in the same period.

Total option volume was more than 6 times greater than average in the session, with calls outnumbering puts by a bullish 65 to 1.

(A version of this post appeared on InsideOptions Pro yesterday.)
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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