The bulls simply can't get enough of Spectra Energy.
, optionMONSTER's Heat Seeker monitoring system detected buying in
the September 33 calls for $0.40 and $0.45. Less than two weeks
later, the company announced the transfer of pipeline assets to its
limited partnership in a move that would lower taxes and boost
dividends. The stock exploded higher, and those calls appreciated
by more than 400 percent.
Now they're adjusting the trade, selling about 24,000 of the
contracts for $2.50 and buying 16,000 September 36s for $1.10. The
transaction let the investor collect a credit of $4.24 million and
keeps him or her in the game for
. (See our
section for more on how to manage risk with options.)
SE rose 0.73 percent to $34.59 yesterday and is up 25 percent so
far this year. It's been riding a wave of enthusiasm toward
domestic natural gas as the United States reemerges as a major
player in the energy industry. The shares are also currently
sitting near all-time highs.
Another investor took a more conservative stance and has been
selling upside calls to smooth a long position in the stock. In a
separate trade yesterday, our scanners showed that 2,300 June 31
calls were bought for $3.80 in volume below previous open interest
while a similar number of September 37s was sold for $0.70.
This suggests that an existing short position was closed and rolled
to the higher strike. Adjusting the trade cost $3.10 but gives the
trader the right to earn an additional $6 on the underlying
position in the shares.
Total option volume was 9 times greater than average in the
session, according to the Heat Seeker. Calls outnumbered puts by
more than 12 to 1.
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