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Option Bulls Toy With More Upside for Mattel

Mattel is trading at its highest levels in 13 years, and option traders are betting on even more upside.

OptionMonster's tracking systems detected the purchase of more than 3,700 February 32 calls for $0.20 to $0.25 yesterday against open interest of 170 contracts. Overall option volume in the name was more than twice its daily average, with total calls outnumbering puts by almost 4 to 1.

Mattel shares finished yesterday up 0.19 percent at $31.06 after hitting an intraday high of $31.69, its highest price since it plunged from above $35 in December 1998. The toy maker gapped higher Tuesday morning after reporting earnings results the night before. Now the shares are attempting to break through long-term resistance last encountered in 2007 and, before that, in 1999.

For the calls purchased yesterday to turn a profit, Mattel's stock would need to gain roughly 4 percent by expiration on Feb. 17.

—Russell has no positions in MAT.

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David Russell is a reporter and writer for OptionMonster.

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