Options: Careful Trade in Charles Schwab

The stock has rallied 50% since reaching a 52-week low of $11.34 on March 5. It is currently up approximately 17 cents to $17 a share.

With this type of call volume, it is most important to not be fooled into thinking that all of this volume might indicate a bullish or bearish play on the shares. Remember, the investor bought as many options as they sold.

But for the long term, it probably indicates that at least one investor thinks the shares will be hard-pressed to rally much higher than $18. However, for bullish investors in the stock, there is plenty of supply around in the Aug. 18 calls for people who want to bet on a rally.

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Jud Pyle is the chief investment strategist for Options News Network and the portfolio manager of TheStreet.com Options Alerts. Click here for a free trial for Options Alerts. Mr. Pyle writes regularly about options investing for TheStreet.com.