One trader apparently believes that Rosetta Resources is on its
optionMONSTER's Heat Seeker tracking system detected the purchase
of 6,000 June 50 calls for $1.20. Equal-sized blocks were sold the
June 35 puts for $0.50 and the June 55 calls for $0.25. There was
essentially no open interest in any of the three strikes before the
The activity resulted in a cost of $0.45 and has the potential to
earn a maximum profit of more than 1,000 percent if the shares
close at or above $55 on expiration. The strategy combines elements
of a combination trade and a
bullish call spread
. (See our
ROSE gained 0.24 percent to close at $45.76 yesterday but has lost
about 15 percent of its value since mid-March. It's attempting to
make a higher low around its current level than the levels where it
bounced in October, December, and January.
The company focuses on extracting oil and natural gas from
. Huge discoveries focused investor attention on the industry group
last year, but it has underperformed more recently as a supply glut
depressed natural-gas prices. Last week, regulators approved a
natural-gas exporting station in Louisiana.
That could put the U.S. back on the map as a major energy exporter
for the first time in decades. Heat Seeker also detected bullish
call buying in another shale name,
Kodiak Oil & Gas
, recently, so investors may now be regaining interest in the
Overall option volume in ROSE was 14 times greater than average in
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