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Hertz Draws Upside Options Activity Ahead of Earnings

Hertz drew upside option activity Friday ahead of this morning's earnings report.

The car-rental giant hit a 52-week high of $13 before closing the week at $12.88, up 1.18 percent on the session, then bounced another 2.87 percent in after-hours trading. The stock is up some 29 percent since the beginning of this month, getting a big boost Thursday from a "buy" rating at Goldman Sachs with a price target of $15.50.

HTZ rarely gets much option activity, with an average volume of just 535 per day for the last month, but it saw nearly 6,000 contracts trade Friday. About 95 percent of those options were calls.

OptionMonster's Heat Seeker systemshowed that 4,605 calls changed hands at the May 15 strike against open interest of just 104 contracts. The calls traded in a strong buying pattern at prices between $0.20 and $0.35.

For those calls to turn a profit, the stock would need to rise roughly 18.5 percent from Friday's closing price before the options expire on May 21.

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Hertz Competes With:

Avis Budget

United Rentals

RSC Holdings

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Options Trading School:

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Disclosure:

Najarian owns a long call spread in HTZ

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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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Disclaimer

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