By Mike Yamamoto, managing editor of OptionMonster

BATTLE CREEK, Mich. ( TheStreet) -- Kellogg ( K) is drawing upside option activity as the food company's shares trade in an increasingly narrow range.

OptionMonster's real-time systems showed that 2,857 April 55 calls changed hands Tuesday in a strong buying pattern, most of them going for 20 cents. The trading dwarfed both the open interest of 261 contracts and the average call volume of 18 per day at that strike; overall calls at all Kellogg strikes outnumbered puts by more than 4 to 1.

The cereal maker closed Monday up 0.6% to $52.83. Shares posted 52-week highs over $55 in January but gapped lower on Feb. 4 after the company's fourth-quarter earnings came in lower than analysts had expected.

Since then, the stock has been trading sideways in a tight range mostly between $52 and $53. That may be leading some technical analysts to believe that the shares are ready to break one way or the other.

Kellogg shares would need to rise at least 4.5% for the calls purchased Tuesday to turn a profit before expiration on April 16. The company is scheduled to release its next earnings report on April 29.

At the time of publication, Yamamoto had no positions in the stock mentioned.

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