The bulls are wagering that Quicksilver Resources is finally
ready to turn around.
optionMONSTER's Heat Seeker tracking system on Friday detected a
surge of call buying in the beaten-down energy company, which has
lost more than half its value in the last six months. Most of the
activity focused on the February 6 contracts, which changed hands
late in the session for $0.15 to $0.30.
Volume exceeded 15,000 in the strike, nearly 6 times previous open
interest. The March 6s were also bought nearly 5,000 times for
$0.35 to $0.40.
KWK pushed higher as the option trades crossed, closing up 3.32
percent to $5.29. The stock has plummeted since announcing a big
capital-spending plan in August, which led investors to believe
that Quicksilver will continue bleeding cash.
The oil and gas producer is also facing worries about lower selling
prices as cheap natural gas from domestic shale fields floods the
market. Carbo Ceramics and RPC, which provide so-called fracking
services, both warned of slowing capital expenditures in the
Given that backdrop, Friday's
apparently think that it's a good time to place contrary bets in
favor of KWK. Short interest exceeds 20 percent of the float, and
the shares are at their lowest level in almost three years--factors
that could support a rebound. (See our
Overall option volume was 22 times greater than average on Friday,
with calls outnumbering puts by 19 to 1.