Traders are betting that Dick's Sporting Goods will rally by spring.
OptionMonster's monitoring system detected the purchase of 6,900 March 57.50 calls for $2.50 to $2.80 yesterday. This represents fresh buying, as open interest in the strike was only 921 contracts before the session began.
Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)
DKS fell 1.34 percent to $54.44 yesterday and is down 6 percent in the last month. The sporting-goods chain announced mixed results on Nov. 15 and is expected to report its next quarterly numbers in pre-market hours on March 7, eight sessions before yesterday's calls expire.
Overall option volume was in the name was twice its daily average yesterday. Calls outnumbered puts by a bullish 4-to-1 ratio.
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