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October 29, 2013  Tue 11:05 AM CT

Outerwall has rebounded from a major selloff, and now traders are looking for a breakout to new highs.

optionMONSTER's Heat Seeker monitoring system detected the purchase of some 2,000 April 75 calls for $3.30 and the sale of a matching number of April 90 calls for $0.90. That translates into a cost of $2.40.

Volume was below open interest at the lower strike, so there are two possible explanations for the activity. One is that the investor owns shares in the company and had previously sold the 75s as part of a covered call strategy. Rolling the position higher would let him or her raise by $15 the level at which they must sell the stock.

Alternately the strategy might be a new bullish call spread, looking to leverage a move to $90. They'd collect $15 if that level is reached, resulting in profit of 525 percent. See our Education section for more.

OUTR rose 2.22 percent to $66.38 in late morning trading. It plunged into the mid-40s in late September after cutting guidance, quickly fought its way back and pushed higher again last week after increasing its stock buyback plan.

Formerly known as Coinstar, the company has shifted its focus to renting DVDs under its Redbox business. Its all-time peak was below $72 last year, so today's trader is looking for a breakout to new record levels.

Total option volume is slightly above average in the session, according to Heat Seeker. Calls outnumber puts by a bullish 9-to-1 ratio.

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