Bulls look for Copart to drive higher

optionMONSTER

Copart drew upside option activity earlier this month, and bullish traders are returning to the car-auction service today.

More than 5,700 June 40 traded in a heavy buying pattern this morning, led by two prints of 3,112 and 2,074 each that went for $0.60 and $0.65 respectively, according to optionMONSTER's Heat Seeker system. This is clearly new positioning, as open interest in the strike was only 479 contracts before the session began.

CPRT is up 1.4 percent to $36.90 in midday trading. The company, which operates a virtual-bidding system for used cars, bounced off support at the $32 level in mid-April and has been rising steadily since then. Copart has not yet announced its next quarterly report, but last year's calendar suggests that those numbers will come out in late May. (See our Education section)

The long calls bought today are looking for CPRT to gain roughly 10 percent by expiration in mid-June. These options lock in the purchase price for the stock no matter how far it might rise, but they will expire worthless if shares remain below $40.

Total option volume in the name has already reached 9,200 contracts, more than 3.5 times its daily average of 2,494 for the last month.

The activity follows a bullish call spread in the November contracts detected by the Heat Seeker on May 3.


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