Options Trading News

January 31, 2013  Thu 4:45 AM CT

Home Depot is at its highest levels in more than a decade, and traders remain firmly bullish.

More than 3,300 March 65 calls changed hands in a strong buying pattern yesterday, with the largest blocks going for $3.05, according to optionMONSTER's Heat Seeker tracking system. The volume was 3 times higher than the strike's open interest of 1,104 contracts at the beginning of the day, indicating that this is new positioning.

Our scanners also show that a block of 1,000 March 67.50 puts was sold for $2.82 in volume that was above the previous open interest at that strike. This put selling does not appear related to the March 65 call buying, but both are positive on the stock.

The long calls are looking for HD to rise above $68.05, while the short puts are betting that it will be higher than $67.50 through expiration in mid-March. (See our Education section)

HD was up fractionally yesterday at $67.24 after hitting $68.15 on Monday, its highest intraday price since April 2000. The home-improvement retailer is scheduled to report fourth-quarter earnings on Feb. 26.

Total option volume in the name exceeded 12,000 contracts yesterday, 33 percent more than its daily average in the last month.
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