Call Players Place Their Bets on The Gap

Call options were in heavy rotation Monday on The Gap GPS. Within the first hour of trading, 3,350 of these bullishly oriented options crossed the tape -- about four times the expected number of call contracts. The bulk of this activity took place at The Gap's January 2011 22.50 call, where 3,031 contracts were traded. Approximately 77% of these calls changed hands at the ask price, indicating they were purchased. However, this skew toward calls simply continues a recent trend for GPS. During the past 10 days, speculators on the International Securities Exchange (ISE) have bought to open 5.99 calls for every put on the retailer. This ratio ranks above 75% of other such readings taken during the previous year, indicating that traders on the ISE have purchased calls over puts at a faster pace just 25% of the time. Continue reading the article.