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Bulls Bet on Good Earnings From Toll Brothers

Tuesday, 6 Dec 2011 | 5:41 AM ET

Toll Brothers reports earnings today, and the bulls expect good news.

Buyers piled into the December 22 callsin the final two hours of yesterday's session, according to OptionMonster's real-time tracking systems. They paid 20 cents to 35 cents for almost 5,000 contracts, about triple the previous positioning in that strike. Long calls lock in an entry price on stock, which makes them highly leveraged to movements in the share price.

Toll Brothers rose 2.52 percent to $20.74 yesterday. The luxury homebuilder's stock is up sharply since trading below $14 at the beginning of October, and traders are looking for still more upside.

Of more than 32,000 contracts that traded in the session, fewer than 7,000 of them were puts , a reflection of the bullish sentiment in the name.

— Najarian owns TOL calls.

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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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