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Bulls Hitch a Ride With JB Hunt

By Mike Yamamoto, managing editor of OptionMonster

NEW YORK -- JB Hunt Transport Services (JBHT) has been range-bound for months, but traders are looking for it to break out.

OptionMonster's trade scanners detected the purchase of more than 3,000 November 75 calls for $2.60 to $2.84 on Friday, including one print of 2,678. This is clearly fresh buying, as open interest in the strike was just 90 contracts before the new trades appeared.

These calls lock in the price where the stock can be purchased, letting investors position for gains using much less money than buying shares directly. The options could generate significant leverage in a rally but will expire worthless if the stock doesn't move in the next two months.

JB Hunt's shares rose 0.8% to $74.92 on Friday, despite the S&P 500 shedding more than half a percent in the session. The trucking company has traded mostly between $70 and $78 since April but is now back above its 50-day moving average.

Third-quarter results are tentatively scheduled for release on Oct. 14. Trucking names pulled back a bit last week but have gained nearly 60% as a group this year.

Total volume in the name was 28 times its daily average, with calls outnumbering puts by a bullish 70-to-1 ratio.

Yamamoto has no positions in JBHT.
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.

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