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Iron Mountain pullback attracts bulls

David Russell (david.russell@optionmonster.com)

The bulls are taking a shot at Iron Mountain as the stock retreats from an all-time high.

optionMONSTER's Heat Seeker monitoring system detected the purchase of 7,900 June 37.50 calls against open interest of just 653 contracts. Most of them priced for $0.35 and $0.40.

Long calls lock in the price where shares can be bought in the document-shredding company, which has been rallying on hopes that it will convert into a tax-free real-estate investment trust. Their low initial cost helps investors manage risk and offer the potential for significant leverage should the stock rally. For instance, a 10 percent gain in the stock price will at least double the value of the calls. (See our Education section)

IRM fell 2.9 percent to $34.80 in morning trading. It had rallied 26 percent between the start of the year and mid-May but has been retreating along with the rest of the market since.

Total option volume is almost twice the daily average so far today, with calls outnumbering puts by 14 to 1.

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