Is Office Depot Ready for Liftoff?

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.
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.