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Bulls shopping at Home Depot again

David Russell (david.russell@optionmonster.com)

Housing-related stocks have been coming back to life, and the bulls are shopping at Home Depot once again.

optionMONSTER's tracking programs detected the purchase of about 4,600 May 87.50 calls, most of which priced for $1.58 to $1.70. Volume was more than triple previous open interest, which shows that new money was put to work on the long side.

Calls lock in the price where a stock can be bought, letting investors cheaply position for a move higher. Their low entry cost can also result in significant leverage to the stock. (See our Education section.)

Traders also bought short-term weekly 82 calls expiring next Friday, Jan. 10, for $0.75 to $0.93.

HD rose 0.49 percent to $82.34 on Tuesday, its fourth straight all-time closing high. The stock rallied through May and consolidated much of the year along with other housing stocks. But now the whole group is starting to perform and HD is following.

Overall option volume was more than twice the daily average in the session, with calls accounting for a bullish 71 percent of the total.

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

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