Chico's dropped on a poor earnings report Wednesday, but the
bulls came roaring back yesterday.
optionMONSTER's Heat Seeker tracking program detected heavy
activity in the October 17 calls, with buyers initially paying
$0.25. Premiums steadily climbed and would
more than double
to $0.60 as nearly 20,000 contracts changed hands, more than 100
times the strike's previous open interest.
lock in the price where investors can buy stock in the retailer,
letting them cheaply leverage a move higher. That way the traders
know that they won't miss a rally and don't have to lock up as much
capital as would by owning shares directly. (See our
The bullish option activity was cited by optionMONSTER co-founder
Jon Najarian on CNBC's "
" yesterday. The action came a day after heavy buying in the
November 17 calls, which inflated more than 50 percent yesterday.
CHS gained 4.64 percent to $16, erasing the previous session's
drop. Overall option volume was almost 20 times average yesterday,
with calls accounting for a bullish 94 percent of the total.
Najarian owns CHS calls and shares.
(A version of this post appeared on
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