Markets

Big-oil players bullish on Occidental

Occidental Petroleum bounced yesterday, and the big-oil bulls jumped on board.

optionMONSTER's Heat Seeker system detected unusual activity in the May 80 calls, with large purchases occurring for $3.15. Volume continued to build throughout the session and ended yesterday at 10,899 contracts, more than twice the previous open interest in the strike, indicating that these are new positions.

Long calls lock in the price where investors can buy shares in the energy giant, providing significant leverage in the event of a rally. That's exactly what happened yesterday because OXY inched higher after the options hit and those calls appreciated by more than 10 percent to $3.50. (See our Education section)

OXY ended the session up 2.19 percent to $80.68. It's been bouncing in a range for the last year and is now attempting to make a higher low than the level where it based in January.

Total option volume was 5 times greater than average in the company yesterday. Calls outnumbered puts by a bullish 4-to-1 ratio.

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

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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