By David Russell, reporter at OptionMonster
NEW YORK -- Some traders think that Office Depot (ODP) is ready for blastoff.
OptionMonster's monitoring programs detected the purchase of some 2,400 June 4.50 calls for 10 cents. Volume was more than 60 times previous open interest, indicating that new positions were initiated.
Calls lock in the price where shares can be purchased in the office-supply retailer. That can provide significant leverage in a rally while limiting the amount of capital at risk.Office Depot shares rose 0.94% to $4.31 on Friday. The stock rallied hard late last year, pulled back and has been following its 100-day moving average back higher in the last month. That could make some momentum traders think that it will continue rising in coming weeks. Total option volume was slightly above average in the name, with calls outnumbering puts by 46 to 1. Rival OfficeMax also had bullish activity the previous week. Russell has no positions in ODP.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV