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Options Looking for An Allstate Pop

Allstate has been sliding steadily since the beginning of June, but some traders are apparently looking for the insurance company to bounce in the next month.

Calls have been averaging 4,341 in ALL but yesterday totaled nearly 35,000. Much of the buying was concentrated on the July 26 contracts, where more than 4,500 calls traded at four times the open interest for $0.50 to $0.65, dwarfing the average volume of just 89 calls at that strike.

Traders were also active in the July 29 options, where nearly 16,700 calls changed hands at $0.20 to $0.25, according to OptionMonster's proprietary tracking programs. Total calls at all strikes outnumbered puts by more than 6 to 1.

Shares of Allstate, which came into the month trading near $27, fell 1.65 percent yesterday to close at $23.26. For those July 26 and July 29 calls to become profitable, the stock would need to rise at least 14 percent and 26 percent respectively by the time the options expire on July 17.

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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.

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