The bulls are looking for a gusher when oil-services company
Cameron reports earnings tomorrow morning.
optionMONSTER's Heat Seeker monitoring program detected the
purchase of about 1,400 September 65 calls for $1.95 and the sale
of an equal number of September 70 calls for $0.50. Volume was more
than 50 times open interest at each strike, indicating that new
positions were initiated.
locks in a buy price on a stock, while writing calls forces the
investor to sell shares if they reach a certain level. Combining
the two allows the spread between the two prices.
In the case of today's transaction, the trader will collect $5 if
CAM closes at or above $70 on expiration. It cost $1.45 to open the
position, implying potential profit of up to 245 percent. (See our
section for more on the strategy, known as a
bullish call spread
CAM is down 2.19 percent to $62.97 in afternoon trading as it tries
to hold support at its 50-day moving average. The stock has spent
most of the year consolidating above its previous all-time highs
from 2008 despite weak results recently.
Total option volume is 5 times greater than average in the session,
according to the Heat Seeker. Calls outnumber puts by a bullish 6
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.
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