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December 12, 2012  Wed 4:14 AM CT

DNR: SEE CHART GET CHAIN FIND STRATEGIES
Denbury Resources has been rebounding in the last month, and one trader apparently believes that there's more fuel in its tank.

optionMONSTER's Heat Seeker tracking system detected the purchase of 2,000 January 16 calls in an 8-minute span yesterday, mostly for $0.68. The volume was well above the strike's open interest of 596 contracts at the start of the session, so this is clearly a new position.

DNR rose 0.5 percent to close at $16 even. Shares of the oil and natural-gas exploration company bounced at $14.24 on Nov. 15 and have been trending higher since then, climbing above their 100-day moving average in the last two sessions.

Yesterday's long calls are looking for DNR to gain roughly 4.25 percent by expiration in mid-January. Overall calls in the name outnumbered puts by 24 to 1, a reflection of the bullish sentiment. (See our Education section)
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Real vs. Synthetic

We now know that there are two ways of creating a call position, a put position, and a stock position. We can simply use the actual real security or we can recreate it synthetically. We can create these positions in both long and short forms and this ability sets up an interesting scenario--an arbitrage!

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