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• L-3 Communications breaks key level
• Unusual ITT play exploits industry panic

• KOG 100% Rate It

Kodiak Oil & Gas was a well-loved energy name last year, and now the bulls are coming back.

The shale-energy stock soared from around $4 in October to over $10 by February. Since then it's pulled back and bounced near $8.50.

optionMONSTER's Heat Seeker shows that buyers stepped into the May 7.50 calls on Friday, with large blocks pricing for $1.35 to $1.45. More than 7,700 traded against open interest of just 545 contracts.

KOG rose 5.15 percent to $8.99 on Friday. It began to rally about two hours after the options appeared on our monitoring systems. The company is scheduled to report earnings after the bell on May 3.

Long calls lock in the price investors must pay to buy shares, so they can deliver significant leverage in the event of a rally. For example, if KOG rises less than 20 percent to $10.50, they will more than double in value. They're considered in the money because the strike price is below the share price. (See our Education section)

Overall option volume in KOG was 7 times greater than average in the session. Calls outnumbered puts by more than 3 to 1.

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