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Why bulls are building into USG

(The following is an example of notable trading cited on optionMONSTER's InsideOptions Pro service yesterday.)

The bulls are piling into USG with shares at a key level.

optionMONSTER's Heat Seeker shows that nearly 3,000 January 30 calls were bought for $0.75 to $0.90 yesterday. Volume was more than double the strike's previous open interest of 1,257 contracts, indicating that new positions were initiated.

Long calls lock in the price where investors can buy a stock, letting them profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis. (See our Education section)

USG rose 2.82 percent to $26.62 yesterday. The wall-board maker is down more than 14 percent in the last month but is trying to hold long-term support at the $26 level. The company's next earnings report is scheduled for Oct. 22.

Total option volume in the name was more than 8 times its daily average for the last month. Overall calls outnumbered puts by 11.5 to 1.

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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