Quick move expected from Cabela's

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The bulls apparently believe that Cabela's will start moving again soon after months of consolidation.

optionMONSTER's Heat Seeker monitoring program detected the purchase of more than 2,500 January 70 calls for $0.30 to $0.50. Volume was more than 18 times the previous open interest at the strike, showing that new money was put to work.

These long calls lock in the price where a stock can be purchased, letting investors cheaply position for a rally. They can also generate significant leverage if traders get the direction right. (See our Education section)

CAB is up 0.27 percent to $65.97 in afternoon trading. The sporting-goods retailer more than doubled in value between the start of 2012 and last May but has been range-bound since. The stock is back above its 200-day moving average, which could make some momentum traders think that it's ready to rally again.

While the company hasn't yet announced the date of its next earnings release, last year's calendar suggests it will occur in mid-February, after today's contracts expire.

Total option volume is about 11 times greater than average so far in the session, according to the Heat Seeker. Calls outnumber puts by more than 15 to 1.



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: CAB

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