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Calls aim for rally in Energy Transfer

Traders are looking for Energy Transfer Partners to make a big move in a short time.

optionMONSTER's Heat Seeker monitoring system detected the purchase of about 5,000 August 70 calls, compared with open interest of just 419 contracts. The first blocks priced for $0.25, followed by a large chunk for $0.35. Subsequent prints crossed for $0.75 after the shares pushed higher.

Long calls lock in the price where shares can be bought in the natural gas storage and pipeline company. Investors use them to prevent a stock from running away from them and to amplify moves to the upside. That leverage was on display yesterday as those August 70s more than doubled in a matter of minutes. (See our Education section for more on the leveraging power of options.)

ETE closed the session up 1.32 percent to $64.48 and has gained more than 50 percent in the last year. Shares have been riding a wave of bullish sentiment toward domestic energy production and as management plans new transportation projects. Earnings will be announced before the opening bell on Aug. 8.

Overall option volume was 14 times greater than average, according to the Heat Seeker. Calls accounted for a bullish 94 percent of the total.

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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