Bulls Go for Ride With Harley-Davidson

By David Russell, reporter at OptionMonster

NEW YORK -- Harley-Davidson (HOG) is trying to bust out of its current range and the bulls piled in Tuesday.

OptionMonster's real-time scanners detected the purchase of almost 5,300 December 48 calls against open interest of 571 contracts Tuesday. The first blocks priced for 30 cents, but premiums then rose as high as 93 cents as the iconic motorcycle stock climbed, which shows the kind of leverage that can be achieved with options.

Calls lock it the price where investors can buy stock, so they can make huge moves on a%age basis from a modest gain in the underlying share price. But these options will expire worthless if the stock doesn't go in the right direction quickly enough.

The company's shares rose 2.06% to close at $47.62 Tuesday. They have been trapped below $48 since late June, so Tuesday's call buyers are looking for that resistance to give way by expiration at the end of next week.

Total option volume was almost 10 times greater than average in the session. Calls outnumbered puts by a bullish 37-to-1 ratio.

Russell has no positions in HOG.

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.