Bulls Keep Rolling With Lowe's

By Pete Najarian, co-founder of OptionMonster

NEW YORK -- Lowe's ( LOW) can be a great derivative play on the housing market, and the bulls are sticking with the name at all-time highs.

OptionMonster's tracking systems show that a trader rolled a long position in the July 43 calls up to the August 44 strike. He or she sold the 43s for $1.07 and bought the 44s for $1.04, taking in a small credit on the trade while repositioning for further gains in options that expire a month later. About 2,200 contracts changed hands in each.

These calls lock in the price where shares can be purchased in the home-improvement retailer, letting investors cheaply position for gains in the stock. They can generate major leverage in a rally.

Lowe's shares rose early yesterday and finished the session up 0.71% to a record close of $43.81. Calls outnumbered puts by almost 3 to 1, a reflection of the bullish sentiment.

Najarian owns LOW calls.
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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