Call Volume Spikes on Foot Locker, Inc.

Call volume has exploded this week on Foot Locker, Inc. (FL). Specifically, call activity ramped up to 24 times the norm on Tuesday, and volume today stands at six times the daily average. After taking a closer look at some of the major trades, it looks as though speculators are favoring the stock's 12.50-strike calls.

On Tuesday, call volume appeared to reveal a bullish bias -- the International Securities Exchange (ISE) reports that 5,509 calls were bought to open yesterday, compared to just 271 puts. FL's most active strike on the session was the November 12.50 call, where 11,987 contracts traded on open interest of 2,164. Implied volatility rose 4.6% as a result, and open interest at this back-month strike now stands at 7,189 contracts.

Meanwhile, in today's session, the October 12.50 call is the center of attention. Nearly 4,000 contracts have crossed the tape so far, easily outstripping open interest of 309 contracts. About 72% of these calls have traded at the ask price, indicating a skew toward buying activity, and implied volatility was up 8.4% at last check.

No news in particular seems to have sparked this bullish onslaught, judging by FL's relative lack of headlines. Plus, the retailer isn't scheduled to report earnings until mid-November, so pre-event speculation also seems out of the question.

In any event, it could cause trouble for the security if traders continue to stack up call open interest at 12.50 strikes. FL has already been battling resistance in the $12-to-$13 neighborhood, and a glut of out-of-the-money calls in this area could exert additional pressure.

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