The energy trade has been a constant drumbeat for months, and yesterday the bulls turned to Encana.
OptionMonster's tracking systems detected heavy buying in the February 19 calls, initially for $0.45 to $0.50. The Canadian natural-gas stock was trying to hold support at $19 when the trades hit, but then it started to climb.
Calls lock in the price where investors can buy shares, so they can generate some nice leverage in the event of a rally. That's what happened as the stock pushed higher because those options would trade for $0.80 later in the session. Some 12,600 contracts changed hands against previous open interest of just 709 in the strike at the beginning of the day, clearly indicating new activity.