Bulls think nothing runs like Deere
Pete Najarian | [email protected]
optionMONSTER's Heat Seeker tracking system detected heavy trading yesterday in the February 100 calls for $0.56 to $0.60 and the February 105 calls for $0.19 to $0.23. In some cases, traders bought one and sold the other to leverage a sprint higher in the next two weeks.
Long calls lock in the price where investors can buy shares, so they can generate significant leverage in the event of a rally. It would take quite a move to reach those $100 and $105 strike prices, but yesterday's traders are willing to take that risk. (See our Education section)
DE climbed 1.13 percent to close the session at $95.05, another 52-week high. The company, which is the largest supplier of agricultural equipment, has been building factories and research centers in emerging markets and gaining revenues from international sales. JP Morgan upgraded the stock early this month and raised its target to $90.
Calls outnumbered puts in the name by almost 23,000 to 9,000 yesterday, a clear reflection of the bullish sentiment. Total option volume was 5 times greater than average.
Disclosure: I own DE calls.
(A version of this post appeared on InsideOptions Pro yesterday.)