Bulls Score in Dick's Sporting Goods

Where the Dollar Goes From Here

Dick's Sporting Goods reports earnings this morning, and some traders are already looking at giant profits.

OptionMonster's tracking programs detected unusual call buying in the specialty retailer on Friday. Activity focused on the March 50.50 and March 53 contracts. At the time the stock was down about 3 percent, battling to hold its 200-day moving average.

Then the buyers stepped in, and Dick's shares proceeded to erase all its losses and end Friday up 0.48 percent to $50.60. But that was nothing compared with the gain in the options.

Because they cheaply fix the price where shares can be bought, calls such as these can generate significant leverage from even a small gain in the stock price.

The March 50.50s, for instance, traded for $0.95 to $1.05 early, but then shot up near $1.70 shortly before the close. The March 53s gained even more on a percentage basis because of their lower entry price, roughly doubling from the $0.30 to $0.40 range.

More than 3,700 contracts changed hands in the 50.50s, while the 53s turned over 2,500 times. That was more than twice previous open interest at each strike.

Total option volume in the name was 15 times greater than average in the session, with calls outnumbering puts by more than 3 to 1.

—By CNBC Contributor David Russell

Additional News: Dick's Sporting Goods Shares Could Rise 23% in Year: Barron's

Additional Views: Nuance Bulls Look for a Bounce: Russell

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David Russell is a reporter and writer for OptionMonster. Russell has no positions in DKS.