Rockwell Automation Lures Bullish Bet

OptionMonster co-founder Pete Najarian provides options picks Monday, Wednesday and Friday in TheStreet.com's Deep in the Money Calls newsletter.

David Russell, reporter for OptionMonster.

NEW YORK (TheStreet) -- One trader is positioning for a move higher ahead of Rockwell Automation's(ROK Quote) earnings report Monday.

OptionMonster's tracking systems detected heavy buying of the November 45 calls and selling of the November 40 puts. The strategy, broken into several pieces, apparently included buying the calls for about 82 cents and selling the puts for 54 cents. It was executed on about 2,600 contracts.

Rockwell is down 2.5% to $43.11 in afternoon trading. The maker of industrial-control devices more than doubled from March to August and has been consolidating between $40 and $45 since then.

Today's options trade resulted in a net debit of about 28 cents and will earn profit if the stock rallies above $45.28 by expiration. It will generate losses below $40.

Rockwell will issue fiscal fourth-quarter earnings before the market opens on Nov. 9, and management will host an investor meeting at 11:45 a.m. ET on Nov. 12. Rockwell reaffirmed its full-year earnings guidance the last time it reported on July 28.

Later in the session, another investor purchased about 1,000 November 45 calls for $1 to $1.10, which also reflects a bullish outlook for the stock. Overall options volume in Rockwell is about 17 times greater than average today.

-- Reported by David Russell of OptionMonster in New York.