OptionsHouse

Options Trading News

August 20, 2013  Tue 5:16 AM CT

SE: SEE CHART GET CHAIN FIND STRATEGIES
Spectra Energy has been a favorite target for bulls in recent months, and yesterday they returned.

optionMONSTER's Heat Seeker system found heavy buying in the December 35 calls, which saw more than 11,700 contracts trade yesterday. The action was led by blocks of 4,909 and 2,853 that went for $0.85 in volume well above the strike's previous open interest of just 499 contracts, clearly showing that these are new positions.

These long calls lock in the price where traders can buy the stock through mid-December regardless of how far it might rise. The options could be sold earlier at a profit if premiums rise with a rally before then, but the contracts could expire worthless if shares remain below the $35 strike price. (See our Education section)

SE slipped 0.15 percent to $33.49 yesterday. The natural-gas company has been falling from the $36 level since reporting second-quarter results on Aug. 6, breaking below its 50-day moving average last week.

The energy name saw bullish option activityin May and June. Total option volume in Spectra surpassed 15,000 contracts yesterday, quadruple its daily average for the last month, and calls outnumbered puts by a bullish 32-to-1 ratio.

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


Share this article with your friends


Related Stories

SE

Limited gains seen in Spectra Energy

January 15, 2016

A large trader is selling calls in the natural-gas producer, which is down 17 percent in the last three months but has cut its losses in recent weeks.

OptionsHouse

Premium Services

Upcoming Webinar:

Using Options For Income

http://bit.ly/1nY1OKA

Jon Najarian and Adam Mesh of Options Wealth Machine discuss a detailed strategy utilizing credit spreads to generate income, and how any level of trader can use this simple trading technique.

Education & Strategy

The sweet spot

When using the Stock Replacement Strategy, we must remember that in reality, we are doing a STOCK trade. We are just using options. We are replacing the stock position with an option position (long calls).

View more education articles »