How the bulls are playing Ingram Micro

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Ingram Micro reports earnings tomorrow afternoon, and the bulls are jumping in.

optionMONSTER's Heat Seeker monitoring program detected the purchase of more than 3,200 September 20 calls, most of which priced for $1.05. Volume was almost twice the previous open interest at the strike, indicating that new positions were initiated.

These long calls lock in the price where shares can be purchased in the distributor of electronic components, providing a relatively inexpensive way to benefit from gains in the stock price. The contracts also have the potential to generate significant leverage in a rally. (See our Education section)

IM is up 0.35 percent to $20.38 in late morning trading. The stock is up 14 percent in the last three months and is now back around the same level where it peaked in March. That could make some traders expect a big run if resistance is broken but also fear a drop if the numbers are weak.

Total option volume is nearly 200 times greater than average so far today, with not a single put trading so far.



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

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


This article appears in: Investing , Options

Referenced Stocks: IM

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