Occidental Petroleum bounced yesterday, and the big-oil bulls jumped on board.
OptionMonster's monitoring systems detected unusual activity in the May 80 calls, with large purchases occurring for $3.15. Volume continued to build throughout the session and ended yesterday at 10,899 contracts, more than twice the previous open interest in the strike, indicating that these are new positions.
Calls lock in the price where investors can buy shares in the Los Angeles energy giant, providing significant leverage in the event of a rally. That's exactly what happened yesterday because OXY inched higher after the options hit and those calls appreciated by more than 10 percent to $3.50.
Occidental shares ended the session up 2.19 percent to $80.68. Its stock has been bouncing in a range for the last year and is now attempting to make a higher low than the level where it based in January.
Total option volume was five times greater than average in the company yesterday. Calls outnumbered puts by a bullish 4-to-1 ratio.
—By CNBC Contributor David Russell
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David Russell is a reporter and writer for OptionMonster. Russell has no positions in OXY.