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Bulls return to Liz Claiborne

Liz Claiborne had a nice pop last month, and now the bulls are back for more.

optionMONSTER's Heat Seeker tracking system detected heavy buying in the September 5 calls. More than 4,000 traded in the morning for $0.20 against open interest of 493 contracts. The shares started moving almost immediately and rampaged higher as the day progressed, finishing the session up 9.30 percent to $4.70.

The buying continued for as much as $0.30, pushing volume to almost 6,600.

The October 6s were even more active, changing hands more than 8,000 times, with the largest block pricing for $0.28, but volume was below open interest. Some 4,700 October 5 calls were also purchased, mostly for $0.45.

LIZ first appeared on Heat Seeker back on July 12 with buying in the August calls. Those contracts handed investors a double after quarterly revenue beat estimates on July 28. It then fell along with the rest of the market before bouncing yesterday at long-term support.

The company is attempting to shift away from retail stores, and toward direct selling. Because it has struggled for more than a year, short interest is hefty at more than 22 percent of the float. It also has a heavy debt load. Both of those factors could help drive the stock higher if business improves.

Overall options volume in LIZ was 58 times greater than average yesterday, with calls outnumbering puts by 400 to 1.

(A version of this post appeared on InsideOptions yesterday.)

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

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

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