Call buyers take the wheel at CarMax


CarMax popped on a Credit Suisse upgrade on Friday, and the bulls are looking for more.

optionMONSTER's tracking programs detected the purchase of about 4,000 November 34 calls for $0.60 and $0.65. Volume was more than 6 times open interest at the strike, indicating that new money was being put to work.

Those calls lock in the price where investors can buy shares in the automobile retailer. These options can generate some nice leverage in the event of a rally, but they will expire worthless if the stock fails to move. (See our Education section)

KMX ended the session up 2.41 percent to $33.57. It's been shuffling in a range for the last two years but has been gaining since June despite two weak earnings reports. In upgrading the stock to "outperform" from "neutral," Credit Suisse said results could improve and set a $42 target price.

Overall option volume in the name was more than 6 times the daily average, with calls outnumbering puts by 8 to 1.

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

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