MarkWest Energy ended last week with a pullback, and momentum
players jumped in.
optionMONSTER's Heat Seeker monitoring system detected the purchase
of 5,500 January 75 calls against open interest of just 526
contracts. The first trades priced for $1.60 halfway through the
afternoon, followed by more transactions for as much as $1.80. The
largest block fetched $1.75.
lock in the price where shares can be purchased in the Denver-based
pipeline company. Investors use them to avoid missing a rally or to
leverage an otherwise modest move. For instance, a gain of less
than 9 percent by expiration will more than double the value of the
January 75s. (See our
MWE ended Friday's session down 1.87 percent to $70.65. The stock
touched an all-time high of $73.96 earlier in the week before
retreating and is now around the same level where it peaked in May
and August. That could make some chart watchers think that shares
are now sitting at support and ready to move higher.
The company has benefited from its exposure to the fast-growing
domestic-energy industry and is up 38 percent so far this year.
Activity has been very bullish across the sector of late.
Total option volume in MWE was 8 times greater than average in the
session, according to the Heat Seeker. Calls outnumbered puts by a
bullish 17-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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