Call buyers look for gusher in YPF

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Traders apparently believe that there's no stopping Argentine oil driller YPF.

optionMONSTER's Heat Seeker monitoring program detected the purchase of more than 5,000 January 20 calls against open interest of just 246 contracts. Almost all the volume priced in a single large block for $1.10.

Such long calls lock in the price where shares can be purchased, letting investors cheaply position for upside while limiting risk if it drops. They also stand to enjoy significant leverage should the stock continue to rally. (See our Education section)

YPF rose 1.22 percent to $19.14 yesterday. The stock is up more than 50 percent since mid-May, when Chevron agreed to invest $1.5 billion in the company's shale properties.

Traders also bought upside contracts in May , which have now roughly tripled in value.

Total option volume was more than 8 times greater than average yesterday, according to the Heat Seeker. Calls outnumbered puts by a bullish 95-to-1 ratio.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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



This article appears in: Investing , Options


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