Options Trading News

December 4, 2012  Tue 4:15 AM CT

Home Depot has been running higher as the housing market heats up, and traders are looking for even more gains.

optionMONSTER's Heat Seeker tracking system detected heavy volume in the January calls, with the 67.50s trading for $0.91 and the 70s fetching $0.33. The trader may have been selling the lower-strike calls and buying new ones at the higher level.

Long calls lock in the price where a stock can be bought, so they can generate some nice leverage in a rally. Winning positions in one contract can also be rolled into new calls, letting investors take profits while remaining exposed to further gains. (See our Education section)

HD fell 0.14 percent to $64.98 yesterday. The home-improvement retailer's shares have soared more than 50 percent this year and are now back to levels not seen since early 2000.

Calls outnumbered puts by about 23,000 to 7,500 in the session, which shows how bullish sentiment was yesterday.

(A version of this post appeared on InsideOptions Pro yesterday.)
Share this article with your friends

Related Stories


What's behind Home Depot puts

September 21, 2015

The home-improvement retailer has been range-bound mostly since dropping with the broader market late last month.

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


The fastest money in the market
View full report »

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 »