Dissecting a Long-Term Bullish Bet on Lowe's Companies

Within the first hour of Thursday's session, call volume on Lowe's Companies LOW skyrocketed to about 41,000 contracts -- or nearly seven times the equity's expected daily call volume. Checking out the major block trades of the morning, it looks as though a single trader is responsible for much of this option activity. Specifically, a block of 13,000 contracts changed hands at the ask price of $1.18 on LOW's January 2012 30-strike call, suggesting they were purchased. At the same time, a matching block of 13,000 contracts traded on the equity's January 2012 35-strike call, but these options crossed the tape at the bid price of $0.31 -- indicating they were sold. Continue reading the article.