Lowe's shares have never reached $40, but one long-term trader is betting that they will climb to that level by early next year.
OptionMonster's tracking systems detected the purchase of 5,000 January 2014 40 calls for $1.66 on Friday. The volume was almost five times the open interest at that strike before trading began, so this is clearly fresh buying.
Those calls lock in the price where investors can buy shares in the home-improvement chain. The options can generate significant leverage in a rally because of their relatively low cost, but their value will melt away over time if the stock fails to perform.