Bull stays with McMoRan Exploration

By David Russell,

Shutterstock photo

One investor is keeping hope alive in McMoRan Exploration.

optionMONSTER's Heat Seeker monitoring program detected the purchase of about 18,000 February 18 calls for $1.68. Roughly the same number of January 17.50 calls traded at about the same time for $1.18 to $1.21, apparently sold.

Volume was below open interest in January but not February, which suggests that a long position was rolled from one contract to the other. That gives the investor an addition month of upside exposure to the offshore energy producer in return for a cost of about $0.48.

By rolling the position now rather than waiting, he or she avoided the quickening time decay that would erase the value of the January contracts at an accelerating pace as expiration approaches. (See our Education section)

MMR fell 4.05 percent to $15.16, but is up about 10 percent in the last month. Based on today's call roll, the investor is looking for shares to continue higher in the intermediate term.

Overall option volume in MMR is 4 times greater than average so far today, with calls outnumbering puts by 10 to 1.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.

This article appears in: Investing Options
Referenced Stocks: MMR

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