The bulls piled into Stone Energy yesterday as activity
continues to mount in oil drillers and related names.
optionMONSTER's Heat Seeker monitoring system detected the purchase
of more than 2,700 February 33 calls, eclipsing previous open
interest of just 757 contracts. The first block priced for $0.25,
but the strong demand quickly drove premiums up to $0.45.
lock in the price where investors can buy a stock, letting them
cheaply position for a rally. This way, they stand to generate
significant upside leverage while limiting the capital at risk if
they're wrong about the direction. (See our
SGY rose 1.61 percent to $30.92 yesterday. It rallied more than 70
percent between July and October, then slid back near to its August
highs, and has been working its way higher again this month. The
stock is also near its rising 200-day moving average, which could
make some chart watchers think that it's at an attractive entry
Total option volume was 30 times greater than average in the
session. Calls outnumbering puts by a bullish 45-to-1 ratio.
Other energy names have been active as well. Traders, for example,
more than tripled their money in Murphy Oil on Friday. Superior
Energy, Baker Hughes, National Oilwell Varco, and Halcon Energy
have also appeared on Heat Seeker recently.
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