Call buying surges as Polypore pops


Polypore saw bullish option activity yesterday as it broke out of a recent range amid speculation that the name could be added to the S&P 500.

optionMONSTER's Heat Seeker tracking system detected the purchase of 1,050 January 45 calls in 3 seconds yesterday, mostly going for $1.65. The volume was 10 times higher than the strike's open interest of 105 contracts at the start of the session, clearly indicating that this is a new position.

PPO rose 7.93 percent yesterday to close at $44.21, breaking above a range between about $39 and $41 in place since the beginning of this month. Last week the technology-filtration company was identified as a possible candidate to join the S&P 500 with a rising market capitalization that might eclipse that of other names, such as DeVry.

The long calls are looking for the stock to gain more than 5.5 percent by expiration on Jan. 18. But if PPO is below the $45 strike price at that time, those options will expire worthless. (See our Education section)

Overall option volume in the name was 7.5 times its daily average in the last month. Calls outnumbered puts by more than 2 to 1.

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