Xerox (NYSE: XRX) to rally in near-term?

Near-term Xerox Corp. (NYSE: XRX) options volume lit up during Tuesday’s morning trading session thanks to investors who likely expressed bullishness on the business equipment maker.

By 10:35 a.m. EST, 7,000 XRX April 11 calls changed hands for eight cents per contract, or one cent lower than the ask price at the time. These calls are home to current open interest of 2,300 contracts, which suggests investors bought these options to open. Investors who traded these calls will make money if XRX shares rally at least 9% throughout the near term and close higher than $11.08 at April options expiration in 31 days. This rally would be in addition to the 39% of upside we’ve seen since October. The April 11 calls have an implied volatility of 30% compared to 30-day historical volatility of 27%.

It’s interesting that we saw bullishness out of the gate this morning, especially since significant news on XRX has not hit the wires since Feb. 11 (when J.P. Morgan resumed XRX coverage with a neutral rating and price target of $10). However, the company could announce earnings on April 22, and it looks like some bullish investors expect much more movement in the stock prior to the report. XRX shares are currently trading up eight cents to $10.10 so far on the day.