Call buyers bet on rally in Deckers


Traders are looking for Deckers Outdoor to rally in coming weeks.

optionMONSTER's Heat Seeker system detected the purchase of 2,000 September 102 calls late yesterday. This is new positioning, as there was no previous open interest in the strike.

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 expire worthless if shares remain below $102. (See our Education section)

DECK was off a penny to close at $93.91, though it had moved into positive territory late in the session along with the call activity. The footwear retailer, whose brands include UGG, gapped up from the $85 level after reporting earnings last month and has been in a tight range in recent weeks.

Yesterday's total option volume in the name was triple its daily average for the last month. Overall calls outnumbered puts by a bullish 15-to-1 ratio.

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