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Bull dives into calls with Wet Seal

Mike Yamamoto (mike.yamamoto@optionmonster.com)

All of the option volume in Wet Seal so far today is in one bullish trade.

Total volume in the mall retailer isn't huge at 2,881 contracts, but that dwarfs its daily average of just 24 contracts in the last month. optionMONSTER's Heat Seeker system shows that all of those options were in the September 5 calls, which were bought for $0.10 in 3 seconds this morning. This is clearly a new position, as open interest in the strike was just 276 contracts before the trade appeared.

WTSL is up 1.61 percent to $3.79 this morning. The mall retailer had been range-bound for more than a year but began breaking higher at the end of last month.

Today's long calls are looking for shares to rally above $5.10 by mid-September. These options lock in the purchase price for the stock but will expire worthless if they don't rise above the $5 strike price by expiration. (See our Education section)

Wet Seal was upgraded to "buy" from "neutral" at B. Riley on Monday. The company is scheduled to release first-quarter results on May 29 after the market closes.

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