Harman has been on fire, and the bulls are looking for more.
optionMONSTER's Heat Seeker tracking system detected a surge of call activity in the maker of high-end audio systems. A block of 1,000 February 50 calls were sold for $0.90, and an equal number of March 52.50 calls were bought for $1.30. The March 55s were also sold for $0.40.
Volume was below open interest in February but not in March, which suggests that an existing long position was closed in the front month and swapped for a new bullish call spread expiring four weeks later. The net cost was zero, and the trader now stands to earn $2.50 if the stock closes at or above $55 on expiration.
HAR rose 1.19 percent to $50.88 in morning trading and is up 45 percent in the last two months. It's been surging amid strong international demand for its speaker systems, especially those used in automobiles, and gapped higher after its earnings report on Feb. 7. (See researchLAB for more.)
The stock was also the target of bullish call buying on Jan. 9 before the Detroit Auto Show. Investors who jumped in on that trade almost tripled their money .
Overall options volume in HAR is almost 3 times greater than average so far today, with calls outnumbering puts by 500 to 1.
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