Options Trading News

September 14, 2012  Fri 12:18 PM CT

The bulls are still piling into Masco, which has been going straight up for more than a month.

optionMONSTER's Heat Seeker monitoring program detected the purchase of almost 3,700 October 18 calls for $0.10 and $0.15 against open interest of just 4 contracts. Those long calls are far out of the money but could generate significant leverage if the maker of building materials continues to rally. They will become worthless if it doesn't. (See our Education section)

MAS is up 2.67 percent to $15.74 this afternoon and more than 30 percent since the beginning of August. The maker of building materials such as cabinets and faucets has been climbing along with housing stocks as real-estate sentiment brightens. Earlier today it touched $16.21, the stock's highest price since April 2010.

Earnings have remained weak for the company, but enthusiasm toward the broader industry has carried the shares higher. Yesterday there was also bullish call buying in lumber stock Louisiana-Pacific.

Overall option volume in MAS is 9 times greater than average so far today, with calls outnumbering puts by 6 to 1.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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