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April 30, 2013  Tue 2:45 AM CT

BBG: SEE CHART GET CHAIN FIND STRATEGIES
Bill Barrett has been trying to rebound ahead of earnings, and one investor wants to give it more time to rally.

optionMONSTER's Heat Seeker monitoring system detected the purchase of 5,000 September 25 calls for an average premium of $1.025 and the sale of an equal number of May 20 calls for $1.15. Volume was below open interest in the May contracts but not the Septembers, which indicates that an existing position was closed and rolled forward in time.

The investor collected a credit of $0.125 and now has an additional four months to profit from a rally in the Rocky Mountain oil stock. Adjusting the trade at this time prevented him or her from losing value quickly after the company's quarterly results on Thursday afternoon. (See our Education section)

BBG rose 0.55 percent to $20.16 yesterday and is up 25 percent in the last three months. It's been trying to work its way higher after hitting a multi-year low in 2012.

Total option volume was 7 times greater than average in the session, according to the Heat Seeker. Calls outnumbered puts by 31 to 1.
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As discussed last week, when using the Stock Replacement Strategy to replace a stock position to trade direction, we want to use an option that has very similar characteristics to the stock. We talked about using the deep in-the-money, 80 to 85 delta option that is similar in the Greeks and has relatively little extrinsic value which tends to work against us in stock directional trading.

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