EOG Resources has been running steadily higher, and one big
investor is looking for the gains to continue.
optionMONSTER's Heat Seeker monitoring program detected the
purchase of some 8,500 May 100 calls for an average premium of
$4.29. A similar number of April 95 calls was sold at the same time
for $6.59, but volume was below open interest at that strike. So it
appears that an existing long position was rolled forward in time
and up in price.
are leveraged to upside in the oil driller because they lock in the
price where shares can be bought. Investors often shift money from
one contract to another when a rally unfolds, giving them a more
efficient use of their capital.
In the case of today's trade, they recovered $2.30 and remain
exposed to further upside in the name. He or she also avoided being
assigned shares at expiration today because the April 95s are
in the money
. (See our
EOG is up 1.61 percent to $102.62 in afternoon trading and has been
rising along with other energy stocks as investors focus on the
improving global economy. Earnings come out on May 5. The company
has been steadily increasing production and hiked its dividend the
last time it announced results.
Overall option volume in the name is more than 4 times greater than
average in the session, according to the Heat Seeker. Calls account
for a bullish 77 percent of the total.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.
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