Linn Energy reports earnings this week, and traders are already
taking a long-term bullish view on the name.
About 3,900 January 25 calls were bought on Friday, most of them
priced at $3.70 and $3.90, according to optionMONSTER's Heat Seeker
monitoring system. The volume was well above the strike's previous
open interest of 1,289 contracts, indicating that new positions
lock in the price where a stock can be purchased, allowing
investors to position for a rally with much less capital than they
would need to buy shares up front. The contracts can provide
significant leverage on a move higher but will lose value if the
stock drops. (See our
LINE fell 0.83 percent to $28.56 on Friday. The stock gapped down
from the $33 level with the company's last earnings report in late
February and continued to decline throughout March. It has been
trading sideways for the last month.
The oil and natural-gas producer is scheduled to release quarterly
results on Thursday before the opening bell.
Overall option volume in Linn topped 7,300 contracts on Friday,
double its daily average for the last month. Total calls outpaced
puts by a bullish 5-to-1 ratio.
(A version of this post appeared on
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