OptionsHouse

Options Trading News

March 20, 2013  Wed 4:14 AM CT

TLM: SEE CHART GET CHAIN FIND STRATEGIES
Someone wants to get lucky with Talisman Energy.

optionMONSTER's tracking programs detected a surge of bullish activity in the Canadian company yesterday. Activity started less than an hour into the session when about 10,000 July 13 calls were purchased for $0.60 and matching number of July 10 puts were sold for $0.20.

If the stock gaines, the long calls--which lock in the purchase price of the shares--will rise in value while the puts sold short will dwindle. Combining the two is doubly bullish, resulting in a cheap position with potentially massive leverage if the stock rallies. (See our Education section)

TLM, which closed the session unchanged at $12.02, has been consolidating around $12 all year. Energy stocks have been bullish in the last month as investors target companies operating in the United States and Canada.

Later in the session, another 10,000 contracts traded at each strike as the investor added to the bullish strategy. Total option volume was 6 times greater than average yesterday.

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

Share this article with your friends


OptionsHouse

Premium Services

Education & Strategy

Market Level Making You Nervous, Huh? Part 3

In last week's article, we discussed how important the extra cash you save by using the Stock Replacement Strategy over buying the actual stock is! That extra cash in our account instead of being unnecessarily tied up in a stock position allows us to buy the puts we would need to protect our downside in the case of a major sell-off.

View more education articles »