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April 18, 2013  Thu 4:14 AM CT

Skechers has been trending higher, and option traders are bullish ahead of the shoe retailer's earnings report.

optionMONSTER's Heat Seeker program detected steady buying in the May 20 calls yesterday, with more than 2,400 purchased against previous open interest of just 57 contracts. The initial blocks fetched $1.65, but most of the volume priced for $2.05 and $2.10.

Long calls lock in the price where investors can purchase the stock. These options stand to generate significant leverage if it continues to climb but will also expire worthless if it doesn't. (See our Education section)

SKX was down as much as 4 percent at one point yesterday but reversed and ended higher by 0.99 percent to $21.51. The stock has been trending higher for the last year and is now bouncing at its 50-day moving average.

The company hasn't yet announced its next earnings date, but last year's calendar suggests that it will occur before the end of April. Total option volume was 8 times greater than average yesterday, with calls outnumbering puts by more than 20 to 1.

(A version of this post appeared on InsideOptions Pro yesterday.)
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