Trader bets on more gains in Lowe's


Lowe's drew a large bullish trade on Friday as the stock hit a new five-year high.

LOW was up 0.6 percent to close at $33.15 after hitting an intraday peak of $33.63, both its highest levels since 2007. The home-improvement retailer has been rallying from support at $25 in the last three months.

More than 10,000 each of the November 32 calls and December 34 calls traded in unison on Friday, according to optionMONSTER's Heat Seeker tracking system. The largest blocks in each comprised 8,630 contracts, with the November 32 calls sold for the bid price of $1.69 against open interest of 13,392. The same number of December calls were bought for the ask price of $1.08 against open interest of 469.

The trader was very likely rolling long calls forward, given that there are just two weeks until the November expiration, when time decay is at its greatest. He or she would then be selling November calls that are now in the money and buying out-of-the-money calls one month later to capture further gains. (See our Education section)

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