Calls lock in the price where a stock can be bought, so they can generate some nice leverage in a rally. Winning positions in one contract can also be rolled into new calls, letting investors take profits while remaining exposed to further gains.
Home Depot shares fell 0.14 percent to $64.98 yesterday. The home-improvement retailer's shares have soared more than 50 percent this year and are now back to levels not seen since early 2000.
by about 23,000 to 7,500 in the session, which shows how bullish sentiment was yesterday.
—By CNBC Contributor Pete Najarian
Additional News: Sandy Rebuilding Efforts Boost Lowe's Sales
Additional Views: 'Pretty Powerful Backdrop' Ahead for Home Depot: Pro
Options Trading School:
Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com. Najarian has no positions in HD.