Kodiak Oil & Gas is seeing bullish option activity ahead of its earnings report next week.
OptionMonster's trade scanners detected a strong buying pattern in the May 7 calls yesterday as premiums rose from $0.75 to $0.90. More than 3,200 of those contracts changed hands in volume well above the strike's previous open interest of just 671 contracts, a sign that new money was put to work.
These calls lock in a $7 purchase price for shares in the Denver-based company, so they can generate significant leverage if it rallies by expiration in mid-May. The contracts will closely track the stock price because they are already in the money and will rapidly lose value if the shares drop.