Traders running with Foot Locker
Traders are betting that Foot Locker will sprint higher in coming weeks.
More than 3,000 September 57.50 calls were purchased yesterday for $0.55 to $0.95, according to optionMONSTER's Heat Seeker tracking program. This is clearly fresh buying, as previous open interest was just 268 contracts.
These long calls lock in the price where the stock can be purchased through mid-September no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, providing potentially significant leverage, but the contracts will quickly lose value if shares pull back. (See our Education section)
FL rose 2.03 percent to $57.25 yesterday. The athletic-footwear retailer gapped up from about $52.50 with its last earnings report on Aug. 21 and has continued to move higher since.
Yesterday's total option volume in the name was double its full-session average for the last month. Overall calls outnumbered puts by a bullish 7-to-1 ratio.
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