Buyers rolling up and out in Lowe's

optionMONSTER

Lowe's can be a great derivative play on the housing market, and the bulls are sticking with the name at all-time highs.

optionMONSTER's Heat Seeker system shows that a trader rolled a long position in the July 43 calls up to the August 44 strike. He or she sold the 43s for $1.07 and bought the 44s for $1.04, taking in a small credit on the trade while repositioning for further gains in options that expire a month later. About 2,200 contracts traded in each.

These long calls lock in the price where shares can be purchased in the home-improvement retailer, letting investors cheaply position for gains in the stock. They can generate major leverage in a rally. (See our Education section)

LOW rose early yesterday and finished the session up 0.71 percent to a record close of $43.81. Calls outnumbered puts by almost 3 to 1, a reflection of the bullish sentiment.

Disclosure: I own LOW calls.

(A version of this post appeared on InsideOptions Pro yesterday.)

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