One investor wants leverage in Patterson-UTI Energy as the
land-based drilling company works its way higher.
optionMONSTER's Heat Seeker tracking program detected the purchase
of 6,000 October 17 calls for $0.40 and the sale of an equal number
of November 15 puts for $0.25. Volume was more than triple open
interest at both strikes, indicating that new positions were
The strategy is highly bullish toward the company, looking for a
quick rally in coming days and reflecting a willingness to buy
shares if they drop. Selling puts in the second expiration month
let the investor collect more income to reduce the overall cost of
the strategy to just $0.15. (See our
section for more on how options can be used in lieu of buying
PTEN is up 3.07 percent to $17.44 today. It's been basing out in
its current range for most of the last year after crashing from a
long-term peak around $34 in mid-2011.
Sentiment has been increasingly bullish in the energy sector, which
previously took a beating as the Chinese economy slowed and debt
worries swept Europe. News developments recently, including this
morning's German Zew survey of investor confidence, have shown
gradual improvement. That's driven the euro higher, which generally
goes hand-in-hand with stronger oil prices.
Overall option volume in PTEN is 11 times greater than average so
far today, according to the Heat Seeker.
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