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Dow Chemical, sector draw buyers

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Call buyers piled into Dow Chemical yesterday along with bullish option activity in several other names in the sector.

optionMONSTER's Heat Seeker system detected heavy call buying amid volume of 21,538 December 32s that went for an average price of $0.51, 10,409 October 30s for an average of $0.20, and 5,049 November 33s for an average of $0.10. The totals were well above open interest in all three strikes, indicating fresh purchasing across the board.

Overall option volume in the name was more than 7 times its daily average. Calls outnumbered puts by 5 to 1.

DOW rose 5.61 percent to close at $29.91. Shares bounced sharply off recent support around the $28 level after trading above $32 a month ago.

The company is scheduled to report third-quarter earnings results next Thursday, Oct. 25, before the market opens. Yesterday's call buying came as the Heat Seeker identified bullish action in two other chemical companies yesterday, LyondellBasell and Celanese . (See optionMONSTER's InsideOptions Pro premium service)

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