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September 24, 2013  Tue 10:01 AM CT

VOD: SEE CHART GET CHAIN FIND STRATEGIES
Vodafone is at its highest level in more than five years, and one trader is looking for even more gains.

optionMONSTER's Heat Seek system shows that 2,000 November 34 calls were bought for $0.90 this morning. This is clearly a new position, as open interest in the strike was just 72 contracts before the trade appeared.

These long calls lock in the price where the stock can be purchased for the next two months no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, but the contracts will expire worthless if shares are below $34 in mid-November. (See our Education section)

VOD is up 0.67 percent to $33.94 this morning as shares trade at their highest levels since February 2008. The U.K. telecom carrier gapped up from below $30 in late August on its intent to sell its 45 percent stake in Verizon, and VOD has been rising since.

Overall VOD calls outnumber puts by more than 2 to 1 so far today. 
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When using the Stock Replacement Strategy, we must remember that in reality, we are doing a STOCK trade. We are just using options. We are replacing the stock position with an option position (long calls).

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