Bulls Banking With Astoria Financial

By David Russell, reporter at OptionMonster

NEW YORK -- Astoria Financial (AF) isn't a name we see often, but option activity lit up on Friday.

OptionMonster's tracking systems showed unusual action in the September 10 calls, with about 3,000 trading against previous open interest of 375 contracts. The first blocks priced for just 10 cents, but premiums shot up to 25 cents as buyers jumped in.

Calls lock in the price investors must pay for the shares, so they can generate some nice leverage in the event of a rally. If the stock doesn't move, however, those same calls will expire worthless.

Astoria's shares rose 3.28% to $9.46 on Friday. The small-cap regional bank fell hard earlier in the month after a lackluster earnings report and a downgrade by Stifel Nicolaus. But it trades for less than book value, which could be leading some investors to believe that it's too cheap.

Overall option volume was 80 times greater than average in the session. Not a single put traded all session, so the bulls were definitely in control.

Russell has no positions in AF.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.