Options Trading News

January 30, 2013  Wed 3:47 AM CT

Staples drew bullish option activity for the second session in a row yesterday.

optionMONSTER's Heat Seeker system detected the purchase of 3,000 March 15 calls at the same second yesterday, led by a block of 2,628 that went for $0.15. The volume was nearly double the strike's open interest of 1,630 at the start of the session, so this is clearly fresh buying.

SPLS rose 2.17 percent yesterday to finish at $13.66, its highest close since May 2012. The office-supply retailer has been running higher since breaking resistance at the $12 level earlier this month.

Yesterday's long calls, which lock in the price where traders can buy stock, are looking for SPLS to gain roughly 11 percent or more by mid-March. The options could be sold earlier at a profit if their premiums rise with any rally before then, but they will expire worthless if they under below the $15 strike price at that time.

The company is scheduled to announced fourth-quarter and full-year results on March 6 before the market opens. The options expire eight sessions later.

The calls pushed total option volume in the name to about 8,900 contracts, nearly double its daily average of 4,787 in the last month. Calls outnumbered puts by more than 4.5 to 1.

The activity follows heavy buying in Staples' June 14 calls on Monday. Arch rival Office Depot has seen bullish trading as well recently.
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