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Oneok gains as pipelines stay in focus

By: optionMONSTER
Posted: 4/2/2013 6:14:00 AM
Referenced Stocks: OKE

Pipelines have been the dominant group in the last few sessions, and yesterday the bulls came back to Oneok.

optionMONSTER's Heat Seeker program detected the purchase of about 15,000 October 52.50 calls for $1. The transaction dominated activity in a name that sees volume of fewer than 1,200 contracts in an average session.

Long calls lock in the price where investors can buy shares, so they can generate significant leverage in a rally. The trades have already been working for some investors because there was also call buying in the October 50s a month ago. Those calls more than doubled by yesterday's session, despite the stock climbing barely 5 percent in the same period. (See our Education section)

Call buyers have increasingly targeted pipelines in the last week as awareness grows of the United States regaining its status as a major player in the energy industry. Kinder Morgan and Energy Transfer have also seen bullish option paper.

OKE closed yesterday's session up 1.66 percent to $48.46. Total option volume was 22 times greater than average in the name, with calls outnumbering puts by 83 to 1.

(A version of this post appeared on InsideOptions Pro yesterday.)