U.S. Markets open in 8 hrs 49 mins

Bulls think Vulcan Materials will erupt

David Russell (david.russell@optionmonster.com)

Vulcan Materials has pulled back after a strong earnings report, and now the bulls are stepping in.

optionMONSTER's tracking programs detected the purchase of 2,100 May 60 calls yesterday, most of which priced for $2.25 and $2.30. Volume was more than 6 times previous open interest at the strike, indicating that new positions were established.

Calls lock in the price where a stock can be bought, letting investors cheaply bet on a rally. They also can generate significant leverage if the shares move in the right direction and limit capital at risk. (See our Education section.)

VMC rose 0.31 percent to $54.62 yesterday. The sand-and-gravel provider shot up to $60.14 last month after results were announced -- its highest level in more than four years. Shares then retreated to their 50-day moving average before buyers came back.

Total option volume was 7 times greater than average in the name, with calls outnumbering puts by a bullish 15-to-1 ratio.

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

More From optionMONSTER