NEW YORK -- Hewlett-Packard (HPQ) rose with an upgrade from Barclays Tuesday, and the option trading was bullish.
OptionMonster's tracking systems show that traders were looking for a quick move because they were focused on March contracts, which expire at the end of this week. The March 30.50 calls really stood out as more than 19,000 traded with the biggest blocks priced at 24 cents, in volume that dwarfed the strike's previous open interest of just 366 contracts.
These calls lock in the price where the computer maker's stock can be purchased, letting investors cheaply position for a rally without necessarily buying the shares. The options could provide significant leverage if the stock pops in the next few days but will quickly lose value if it stalls or pulls back.
HP shares rose 3.66% to $30.56 Tuesday and are back near their 52-week highs. Barclays issued a $38 price target on the stock, which is one our top picks for 2014.
Overall option volume in the name was triple its daily average for the last month, with calls accounting for almost 80% of the total.
Najarian owns HPQ calls.