Bulls Keep Rolling With Lowe's

Wednesday, 10 Jul 2013 | 5:43 AM ET
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Lowe's 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.

Talking Numbers: Buy Home Depot or Lowe's?
Richard Ross of Auerbach Grayson and Enis Taner of RiskReversal.com explore which has the better tools to build your portfolio.

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

—By CNBC Contributor Pete Najarian

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Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com. Najarian owns LOW calls.



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