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Bulls are returning to Annaly Capital

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Annaly Capital Management is drawing bullish option activity for the third time in the last month.

More than 6,000 October 11 calls traded in a strong buying pattern for $1.01 to $1.04 in 2 minutes yesterday afternoon, according to optionMONSTER's Heat Seeker tracking system. These are clearly new positions, as open interest in the strike was just 197 contracts before the trades appeared.

These long calls lock in the price where traders can buy the stock no matter how far it might rise. But they will track the share price closely because they are in the money and will rapidly lose value if NLY does not climb as expiration approaches in mid-October. (See our Education section)

The action follows bullish call buying at other strikes identified by the Heat Seeker on July 12 and June 25 . Total option volume in the name topped 12,000 yesterday, compared with a daily average of 8,852 in the last month, while overall calls outpaced puts by more than 2.5 to 1.

NLY slipped 0.26 percent to close the session at $11.69. The high-yielding real-estate investment trust came into May trading near $16 but then fell steadily until finding support around current levels this month.

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