Anadarko Petroleum is running, and traders are racking up fast
profits in the energy name.
Just yesterday, optionMONSTER's Heat Seeker monitoring program
detected heavy call buying in the August 115 calls for $0.62 to
$0.86 as investors positioned for upside in the oil and gas
producer. They didn't have to wait long because APC rallied this
morning, and those calls fetched as much as $3.35, as optionMONSTER
co-founders Jon and Pete Najarian just noted on CNBC's "
New positions were also opened. Almost 13,000 June 115 calls were
bought today for $0.60 to $1.15, along with 8,500 August 115 calls
for $1.55 to $3.30.
lock in the price where a stock can be purchased no matter how far
it might rise, allowing traders to cheaply position for gains. The
contracts can quickly lose value if shares pull back, but they can
also provide significant upside leverage in a rally, as was the
case in Anadarko. (See our
The stock has been on a tear since early April, when management
settled an environmental lawsuit for the minimum expected cost. The
Heat Seeker also flagged that move, and subscribers took home
profits in excess of 1,000 percent. (Other huge winners recently
include Allergan and Hillshire Brands.)
APC is up 3.12 percent to $107.16 in afternoon trading and at one
point was up nearly 5 percent in the session. Today's move comes
amid gains in the broader energy sector and rumors that Exxon Mobil
is considering a bid for the company's Eagle Ford Shale assets.
Total option volume in the name is 7 times greater than average so
far in the session, with overall calls outnumbering puts by more
than 8 to 1.
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