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Trader bets Lululemon will stretch much higher

It's been a great November for Lululemon. With a 4 percent rise on Tuesday, the stock is up 17 percent this month. And one options trader appears to think it will stretch even higher.

In a big Tuesday trade, one trader bought several thousand Lululemon January 50/57.50 call spreads for $2.10. This bullish trade will make money if LULU rises above $52.10 by the January expiration, with maximum profits if Lululemon shares rise to $57.50 in the next two months. Above that level, profits will be capped.

"The nice thing about vertical spreads is that we get a pretty good sense of where the trader might think the stock is going," Mike Khouw commented Tuesday on CNBC's "Fast Money."

In this case, "they're targeting about a 6 to 18 percent move between now and January expiration."

That would take the stock nearly back to where it was trading at the start of a rocky 2014 for the athletic apparel company.

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    Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

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