Noble has performed well, and yesterday option traders were targeting the offshore-drilling contractor.
OptionMonster's monitoring systems detected heavy call volume in the name, with 49,000 trading against fewer than 2,400 puts. Calls lock in the price where investors can buy shares, so they can generate significant leverage in the event of a rally.
One big transaction was in the February 40 and 42 contracts. A trader bought the 40s for $1.13 and sold the 42s for $0.47, resulting in a net cost of $0.66. If NE goes to $42 on expiration, the trader will collect the $2 spread — a gain of 203 percent over cost.
The stock closed at $39.61 yesterday, up 1.67 percent. Earlier in the week, the February 38 calls traded heavily for $0.91 and more than doubled by yesterday.
The company will report earnings results on Jan. 23. Argus has cut its estimates, but that hasn't stopped buyers from piling into Noble.
—By CNBC Contributor Pete Najarian
Options Trading School:
Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com. Najarian owns NE calls.