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Bulls snap up Yandex before earnings

David Russell (david.russell@optionmonster.com)

Yandex reports earnings on Thursday, and buyers are stepping in early.

optionMONSTER's Heat Seeker monitoring program detected the purchase of about 3,500 May 21 calls for $0.75 to $0.90 on Friday. Volume was almost 7 times previous open interest at the strike, indicating that this is fresh buying.

These long calls lock in the price where shares can be purchased in the Russian Internet stock. Given their relative cheapness, they can generate significant leverage in a rally. Investors often use the contracts rather than buy stock outright because it limits risk and lets them place bullish bets for much less capital than buying shares outright. (See our Education section)

YNDX fell 2.38 percent to $20.10 on Friday and is back near the same level where it bounced in late 2012. That could be leading some traders to think that it's ready for a bounce.

Total option volume was 6 times greater than average in the session, according to the Heat Seeker. Calls outnumbered puts by a bullish 19-to-1 ratio.

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