Option volume in the Gap is unusually bullish as its shares trade just below five-year highs.
The average daily volume in the name is 5,000 contracts, but eight times that number traded yesterday. OptionMonster's real-time systemsshowed that one block of 22,000 April 24 calls was bought for $0.30 against open interest of just 21 contracts, so it was clearly a new position being opened.
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Traders were also buying the June 24 calls, with two blocks of 4,250 contracts going for $0.75 and $0.80 within a second. This buying was less than half the open interest of 9,379 contracts, but it did come within a couple of minutes of the larger trade so they could be related.
GPS finished the session at $23.15, down 0.63 percent from yesterday, which was its highest close in five years and just off the 52-week intraday high of $23.36 hit in October. Shares have been in a near-vertical run from $19 at the beginning of February.
All of this call buying certainly appears to be a bet that GPS shares will break to new highs over the next month.
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Chris McKhann is an analyst and writer for OptionMonster.