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Big bets on engineering firm KBR

Pete Najarian (ask-pete@optionmonster.com)

KBR is not a name that typically sees much option activity, but yesterday it was lighting up our screens with bullish trades.

optionMONSTER's Heat Seeker system showed upside bets gathering in the January 35 calls, which hit pretty early and kept building all day. Traders first paid $0.94 to $1 and ended the session shelling out as much as $1.14 for the contracts. More than 9,300 of those calls traded, compared with virtually no open interest at the beginning of the day.

These long calls lock in the price where a stock can be purchased, letting investors cheaply position for a move higher. The options can also generate some nice leverage if they move in the right direction. (See our Education section)

KBR rose 1.42 percent to $34.29. The company is a global engineering and construction firm supporting the energy, hydrocarbon, industrial, minerals, and government-services markets.

Total volume in the name was 16 times greater than average. Overall KBR calls eclipsed puts by about 11,300 to about 1,450, an indication of the session's bullish bias.

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

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