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Call buyers shopping for gains in Kohl's

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Kohl's is attracting upside option activity before reporting earnings next week as shares sit at some key levels.
More than 4,200 April 55 calls have traded in a strong buying pattern today for prices ranging from $0.15 to $0.30, according to optionMONSTER's Heat Seeker tracking system. Volume was more than triple the strike's open interest of 1,081 contracts before the session began, indicating these are new purchases. (See our Education section)

The long calls , which lock in the price where traders can buy shares, are looking for KSS to gain roughly 16 percent or more by mid-April. The options could be sold at a profit earlier if they gain value with any rally before then, but they will expire worthless if the stock stays below the $55 strike price.

KSS is up 2.27 percent to $47.53 today, just below its 100- and 200-day moving averages as it tries to fill a gap from late November. The department-store operator is scheduled to release fourth-quarter earnings results next Thursday, Feb. 28 .

Total option volume in KSS surpasses 9,900 contracts so far today, more than double its daily average of 4,229 in the last month. Calls outnumber puts by 8 to 1, a reflection of the session's bullish sentiment.

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