ITT Educational Draws Call Activity

By Pete Najarian, co-founder of OptionMonster

ITT Educational Services (ESI Quote) drew some upside options activity Wednesday as for-profit schools find themselves with a rush of applicants because of rising unemployment.

The company, which operates post-secondary, technology-oriented schools, saw action focused on the July 105 and 110 calls. About 4,500 and 3,900 calls traded at those strikes respectively, well over the open interest.

The industry leader's stock ended the regular session up 1% to $92.89, but fell slightly to $92.70 in after-hours trading. The shares are smack-dab in the middle of their trading range and have found support consistently below $90 in recent months.

The company is trading at the cheapest valuation, and the buyers may be expecting the range to hold and move to the upper end. ITT Educational's enrollment increased 37% in the first quarter, and management plans to open six to eight new locations this year.