Bulls target big move for Sotheby's

optionMONSTER

One trader apparently believes that Sotheby's is going back to its old highs.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 3,000 January 55 calls for $2.20 and the sale of a matching number of January 60 calls for $0.70. Volume was more than quadruple the previous open interest at each strike, indicating that a new position was initiated.

Known as a bullish call spread , the trade cost $1.50 and will inflate to $5 if BID is at $60 or higher on expiration in mid-January. That's roughly the same level where the auction company peaked in 2007 before the financial crisis. The spread would turn a 13 percent move in the stock price into profit of 233 percent. (See our Education section)

BID rose 0.72 percent to $52.96 yesterday and is up 73 percent in the last year. It's been been climbing against heavy short interest, despite weak quarterly profit, as the nouveau riche in China and the Middle East clamor for fine art.

The date of the next earnings release hasn't been announced, but last year's calendar suggests that it will occur in early November.

Total option volume was quadruple the daily average, according to the Heat Seeker. Calls outnumber puts by 16 to 1.

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