OptionsHouse

Options Trading News

December 4, 2012  Tue 4:15 AM CT

HD: SEE CHART GET CHAIN FIND STRATEGIES
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

HD

Cramer: The boom under the radar

February 26, 2015

It wasn't making any sense, no sense at all--until the most brilliant person in the world of home retailing gave us the answer we were looking for.

HD

Cramer: Can the results be trusted?

February 25, 2015

Think skeptical, not incredulous. One makes you money. The other gets you nowhere other than a parlor game at best and a profitless wilderness of thought at its worst.

HD

Trader bets on floor in Home Depot

February 18, 2015

The home-improvement retailer reports earnings next week, and one trader is betting that downside potential will be limited in subsequent months.

Invest Like a Monster - Las Vegas: March 13-14

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Webinar Recording

Turbo Charge Your Trading Profits

Education & Strategy

Gamma

As we continue to discuss the Greeks, we come to the first of the strike based Greeks called Gamma. Gamma is known as the second derivative, while delta is the first.

View more education articles »