By David Russell, reporter at OptionMonster

NEW YORK -- ITT Educational Services ( ESI - Get Report) has been parked at long-term lows, but now the bears are getting nervous.

OptionMonster's tracking programs detected the purchase of about 2,500 May 15 calls for 45 cents and 50 cents Thursday morning. The volume was well above the strike's open interest of just 343 contracts before the session began, definitely showing that new money was being put to work.

Those calls lock in the price where investors can buy shares in the massively shorted for-profit education stock, which can provide some nice leverage in the event of a rally. And that's what happened almost immediately Thursday.

ITT Educational's shares started working their way higher soon after the trades hit, erasing an early loss and closing higher by 6.11% at $13.71. But that gain was nothing compared with the move in the May 15 calls, which roughly doubled to 90 cents shortly before the close as another 2,600 contracts changed hands throughout the session.

The company reports earnings before the bell two weeks from now on April 25. That means there is plenty of time for a potential short squeeze in the stock, which is back to levels last seen in early 2001.

Total option volume in the name was 28 times greater than average in the session, with calls outnumbering puts by 19 to 1.

Russell has no positions in ESI.

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.