By David Russell
The bulls started shopping at Chico's FAS (CHS) yesterday, and they're still in the store.
optionMONSTER's Heat Seeker tracking system detected the purchase of about 5,000 January 10 calls for $1.95 against open interest of 4,683 contracts. It comes one day after the specialty retailer rallied 11 percent following a strong third-quarter earnings report.
The shares advanced another 2.25 percent to $11.38 in late morning trading today. They're still down 20 percent in the last six months following a selloff in retail stocks between May and July, but have recently been showing signs of forming a bottom.
CHS's sales momentum accelerated during the quarter ended Oct. 30 and management, said the trend has continued this month.
Some 8,800 January 11 calls were also bought, mostly for $1.35. That's up from the $1 to $1.05 premium yesterday, when approximately 10,000 of the contracts were purchased.
Overall option volume in CHS is almost 4 times greater than average so far today, with calls accounting for 84 percent of the activity.
Disclosure: No position