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Call buyers step on gas in O'Reilly's

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Traders are betting that momentum will continue to push O'Reilly's Automotive higher this week.

More than 1,300 October 135 calls were purchased for $0.20 to $0.40 yesterday, according to optionMONSTER's Heat Seeker tracking system. This is fresh buying, as open interest in the strike was a mere 57 contracts before the trades appeared.

These long calls lock in the price where traders can buy the stock through the end of Friday's session. But they will expire worthless if shares remain below $135. (See our Education section)

ORLY rose 2.39 percent yesterday to close at $132.17, an all-time closing high. The auto-parts retailer gapped higher this morning after news that rival Advance Auto Parts purchased General Parts International for more than $2 billion.

The company is scheduled to release third-quarter results after the close next Wednesday, Oct. 23.

Total option volume in the name was 7 times its daily average for the last month. Overall calls outnumbered puts by 6.5 to 1.

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