Bulls See More Gas in Lear's Tank
Lear is near its highs of the year, and the bulls are looking for more upside.
OptionMonster's tracking systems detected the purchase of about 3,300 March 50 calls for $1.05 to $1.25 yesterday. The volume was more than 23 times the strike's open interest at the beginning of the day, indicating that these are new positions.
Calls lock in the price investors must pay to buy shares. These options, which are relatively inexpensive, can generate nice leverage in the event of a rally but also stand to lose money if the stock doesn't move.
Lear shares rose 0.93 percent to $47.77 yesterday and were up 27 percent in the last six months. The automotive supplier hasn't been above $50 since the market crashed in the summer of 2011, but yesterday's traders apparently think that it may breach that level.
Shares were trading around $47.40 during most of the option activity, then climbed steadily into the close.
More than 5,300 Lear contracts changed hands in the session, almost 11 times greater than its average amount. Calls outnumbered puts by 15 to 1.
—By CNBC Contributor David Russell
Options Trading School:
David Russell is a reporter and writer for OptionMonster. (Russell has no positions in LEA.