Patterson-UTI Energy has more than doubled since mid-2010, and
one investor is positioning for more upside.
optionMONSTER's Heat Seeker tracking system detected a surge of
call activity in the Texas drilling company. Some 5,000 January 25
calls were sold for $7.75 against existing open interest,
indicating that an existing long position was closed. Seconds
later, a block of 2,850 January 31 calls was purchased for $4.10.
The trader collected a credit of about $2.71 million and will still
make money if PTEN continues to rally. In addition to letting the
investor take profits, rolling to the higher strike increased the
position's gamma from 2.80 to 4.76--meaning that the options will
become increasingly leveraged to upside in the share price. (See
our Education section)
PTEN is up 0.68 percent to $31.18 in afternoon trading. The company
reported better-than-expected earnings and revenue this morning,
fueled by higher rates and an increased number of rigs in
Overall option volume in the stock is 5 times greater than average,
with calls outnumbering puts by more than 290 to 1.
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