Money has been coming back to oil and gas recently, and now
option traders are targeting in Miller Energy Resources.
optionMONSTER's Heat Seeker monitoring program detected the
purchase of 2,000 February 7.50 calls for $0.70 and the sale of an
equal number of February 10 calls for $0.15. Volume is below open
interest at the lower strike, so there are two possible
explanations for the activity.
One is that the investor owns shares in the small-cap company and
had sold the 7.50s as part of a
. He or she may have bought them back today and rolled them to the
higher strike, raising the level at which the stock must be sold by
Alternatively, both halves of the trade may have been opened as new
positions. In that case the strategy is a
bullish call spread
with the potential to earn 355 percent on a move to $10. Either
way, the trader paid $0.55 and is looking for upside in the name.
MILL is rallying 10.97 percent to $7.18 in afternoon trading after
announcing that it brought wells online in Alaska that had
previously been flooded with water. Management also said overall
sales doubled in the last year on a per-barrel basis. In addition,
shares trade at a very small premium to book value.
The energy sector saw lots of bullish activity in September before
slowing in October, but it is picking up again as names such as
calls hit in names such as
Overall option volume in MILL is more than 9 times greater than
average so far today, according to the Heat Seeker. Overall calls
account for about 90 percent of the total.