Bull looks for Ross to reach new highs

By David Russell,

Shutterstock photo

Ross Stores started 2012 with a pullback, but the bulls expect new highs soon.

optionMONSTER's Heat Seeker monitoring system detected the purchase of 2,000 January 50 calls for $0.65 and the sale of an equal number of January 52.50 calls for $0.15. Volume was more than triple open interest in both strikes.

Known as a bullish call spread , the trade cost $0.50 and will earn a maximum profit of 400 percent if the discount-retail stock closes at or above $52.50 on expiration. That's about 8.5 percent greater than its all-time high late last year. (See our Education section)

ROST closed yesterday at $47.62, up 0.7 percent on the session. It rallied more than 35 percent between mid-August and the end of 2011 as its low prices lured growing streams of customer traffic. It will also release December same-store sales this morning, and yesterday's bullish trader have been speculating on a strong report.

Overall option volume was 12 times greater than average, with calls outnumbering puts by almost 2 to 1, according to the Heat Seeker.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.

This article appears in: Investing Options
Referenced Stocks: ROST

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