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Call spread looks for energy from EQT

The bulls are coming back to EQT.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 1,000 March 65 calls for $3 and the sale of an equal number of March 75 calls for $0.75. Volume exceeded open interest in both strikes.

This bullish call spread cost $2.25 and will earn a maximum profit of 344 percent if the natural-gas stock closes at or above $75 on expiration.

EQT rose 3.04 percent to $58.73 yesterday and has been steadily climbing since August 2010. It's been following its 200-day moving average upward, making consistently higher lows along the way.

That could be leading some chart watchers to believe that it's in a bullish trend and may help explain the call spread. The company is benefiting from investor enthusiasm toward natural-gas companies, especially those that produce energy from shale formations. (See our Education section)

Overall option volume in EQT was 7 times greater than average in the session, with calls outnumbering puts by 97 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.


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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