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Traders look for rally in LendingClub

The bulls are targeting LendingClub ahead of quarterly results next week.

optionMONSTER's Heat Seeker market scanner shows that 5,500 March 7 calls were purchased for $1.05 to $1.07 yesterday. Volume surpassed open interest of 1,177 contracts, an indication new money was put to work. Another 10,300 January 2017 8 calls were bought for $1.60 to $1.80 against open interest of 311 contracts.

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 Coaching section)

LC rose 3.12 percent to $7.61 yesterday but is down 47 percent in the last three months. The online lending service is scheduled to report earnings on Feb. 11.

Overall option volume was 6 times greater than average yesterday. Calls outnumbered puts by a bullish 8-to-1 ratio.

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