Market News

October 13, 2016  Thu 8:02 AM CT

Traders are betting on a turnaround by L Brands.

optionMONSTER's monitoring system detected the purchase of some 2,300 November 75 calls for $0.85 to $1.80 yesterday. This represents new positioning, as volume surpassed the strike's open interest of 1,206 contracts.

Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)

LB rose 3.53 percent to $73.04 yesterday but is down 25 percent this year. The parent company of Victoria's Secret is expected to announce quarterly results after the close on Nov. 16.

Overall option volume was 3 times greater than average in the name yesterday. Calls outnumbered puts by a bullish 5-to-1 ratio.

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