Big Buying Looks for Radian to Rally

The upside call action hit quick and early yesterday in Radian Group, a provider of credit-related insurance.

The company announced in the pre-market that delinquencies had fallen in November, the latest sign that loan woes have passed their peak. The stock gapped higher at the open and churned sideways throughout the session, pushing against its 50-day moving average.

OptionMonster's real-time systemsdetected buyers stepping in right away as the session began, with almost all the activity in the January 9 contracts. Large blocks changed hands for $0.40 shortly after the open, and more than 14,000 options had traded by the end of the day versus open interest of just 3,212.

Radian ended the session with a 0.63 percent gain at $8.01. It's been more or less grinding in a range along the $8 level for more than six months and would need to rise more than 17 percent for yesterday's calls to turn a profit.

Overall in the session, options volume was 10 times greater than average at 15,909 contracts. All but 632 of those were calls, so it was definitely a bullish start to the week.

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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.