Bulls come back to Hercules Offshore

By
A A A
Share |

The bulls targeted Hercules Offshore yesterday, and they're coming back today.

optionMONSTER's Heat Seeker tracking program detected the purchase of about 3,400 May 8 calls for $0.35 o $0.40. That follows buying for $0.20 to $0.30 yesterday.

Long calls
lock in the price where investors can buy shares in the oil-service stock. Given their low price, they can generate tremendous leverage on a percentage basis if shares move in the right direction. (See our Education section.)

The strategy makes a lot of sense in the case of a stock like HERO, which is challenging a long-term resistance level in place since mid-2009. Some traders may expect a big move if it breaks out while remaining concerned about a drop. Calls provide upside exposure cheaply while limiting the amount of capital at risk in the event of a pullback.

HERO is up 1.38 percent to $7.36 in morning trading and has risen 48 percent in the last six months. Total option volume is 7 times greater than average so far today, according to Heat Seeker. Calls outnumber puts by a bullish 20-to-1 ratio.



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.

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


This article appears in: Investing , Options

Referenced Stocks: HERO

optionMONSTER

optionMONSTER

More from optionMONSTER:

Related Videos

Stocks

Referenced

Most Active by Volume

61,090,564
  • $61.96 ▲ 0.98%
26,301,609
  • $4.29 ▼ 2.94%
23,651,106
  • $87.25 ▲ 0.56%
22,160,448
  • $3.15 ▼ 0.63%
21,149,807
  • $16.3399 ▼ 0.18%
14,133,164
  • $46.55 ▼ 1.86%
11,550,975
  • $25.75 ▼ 1.90%
11,437,139
  • $565.96 ▲ 7.85%
As of 4/24/2014, 10:33 AM