Advantage Oil & Gas has pulled back, and one trader apparently believes that it will keep on running.
optionMONSTER's Heat Seeker tracking system detected the purchase of 5,000 August 7 calls for $1.20 and the sale of an equal number of May 7 calls for $0.85. Volume was below open interest in May but not in August, meaning that an existing position was rolled from one contract to the other.
It cost the investor $0.35 and provides an additional three months to profit from a rally in the fast-growing energy company, which operates in western Canada. It reported on May 12 that production rose 19 percent in the first quarter while operating expenses per barrel fell 13 percent.
AAV rallied hard between December and April, climbing from about $6.50 to over $9, before rolling over. They're down another 0.75 percent to $7.98 in early afternoon trading today.
However, they appear to be finding support around their 100-day moving average, which some chart watchers may consider a bullish pattern.
Overall option volume in the name is 56 times greater than average today, with calls outnumbering puts by more than 900 to 1.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.