Options Trading News

July 2, 2013  Tue 12:20 PM CT

Traders are rolling with Patterson UTI Energy as the energy driller tries to keep its uptrend intact.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 2,500 July 21 calls for $0.375 and the sale of 1,500 July 20 calls for $0.875. Volume was below open interest at the lower strike, so it appears an existing position was closed and rolled higher.

The investor collected $37,500 making the adjustment, but maintained a net delta of about 1,000 because they increased the number of number of contracts owned. As a result, they will have a similar performance to the upside with less capital at risk. (See our Education Section for more on how to manage trades more effectively with options.)

PTEN is up 1.88 percent to $20.55 in afternoon trading. The stock climbed as high as $25.48 in March and is now attempting to rebound after retreating to its 200-day moving average.

Earnings have beaten expectations for at least the last year. The next quarterly report is scheduled for July 25--after today's calls expire--so the buyers are looking for shares to melt up into the announcement.

Total option volume is 7 times greater than average in the name, with calls outnumbering puts by 62 to 1.
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I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

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