Yelp has been on the rise, and call buyers are riding the rally.
optionMONSTER's Heat Seeker monitoring program detected the purchase of 2,400 November 28 calls for $0.65 to $1. Volume surpassed interest of 1,793 contracts, which indicates that new money was put to work.
Long calls lock in the price where shares can be bought, which lets investors profit from a rally at limited cost. The social-reviews stock saw similar activity in the January 26 calls on Oct. 9, which have appreciated about 50 percent since the initial alert on our InsideOptions Pro subscription service. (See our Coaching section)
YELP is up 0.65 percent to $27.72 in afternoon trading amid takeover speculation. The company was also cited on our Market Action webinar recently because of its heavy short interest, improving results, and a technical basing pattern.
Shares are now trying to fill a gap from July, which could also make chart watchers think that they will continue to muscle higher in the near term.
Total option volume is about 70 percent above average in the name today, with calls outnumbering puts by more than 10 to 1.
Disclosure: I am long YELP.
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