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
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.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.