The bulls are pouring into Oneok as the pipeline company tries
to bounce from long-term support.
optionMONSTER's tracking programs detected unusual volume in the
August 45 calls yesterday, with buyers paying $0.45 and $0.50
halfway through the morning. Volume quickly ratcheted above
previous open interest of 142 contracts, indicating that new money
was put to work. More than 6,300 calls eventually changed hands in
lock in the price where OKE shares can be purchased, providing
investors with a relatively inexpensive way to profit from gains.
That way they risk only a fraction of the stock's value, which
limits the amount of money they can lose in the event of a selloff.
OKE pushed higher after the trades hit and ended the session up
3.55 percent to $41.42. The August 45 calls, however, doubled to
$0.95, which shows the kind of leverage that can be achieved with
options. (See our
Oneok produced some winning option trades earlier in the year but
is now back near its lows from 2012. Pipeline operators have been
weak for the last few months, but the longer-term trend in the
group remains bullish as the domestic energy story takes hold.
Overall option volume was 12 times greater than average in the name
yesterday. Calls accounted for more than four-fifths of the total.
(A version of this post appeared on
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