Options Trading News

April 17, 2014  Thu 12:21 PM CT

EOG Resources has been running steadily higher, and one big investor is looking for the gains to continue.

optionMONSTER's Heat Seeker monitoring program detected the purchase of some 8,500 May 100 calls for an average premium of $4.29. A similar number of April 95 calls was sold at the same time for $6.59, but volume was below open interest at that strike. So it appears that an existing long position was rolled forward in time and up in price.

The long calls are leveraged to upside in the oil driller because they lock in the price where shares can be bought. Investors often shift money from one contract to another when a rally unfolds, giving them a more efficient use of their capital.

In the case of today's trade, they recovered $2.30 and remain exposed to further upside in the name. He or she also avoided being assigned shares at expiration today because the April 95s are in the money. (See our Education section)

EOG is up 1.61 percent to $102.62 in afternoon trading and has been rising along with other energy stocks as investors focus on the improving global economy. Earnings come out on May 5. The company has been steadily increasing production and hiked its dividend the last time it announced results.

Overall option volume in the name is more than 4 times greater than average in the session, according to the Heat Seeker. Calls account for a bullish 77 percent of the total.
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