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Bulls Return to Southwestern Energy

David Russell | Writer, OptionMonster
Thursday, 20 Jun 2013 | 5:32 AM ET
Natural gas production platform.
Getty Images
Natural gas production platform.

For the second session in a row, the bulls targeted Southwestern Energy yesterday.

OptionMonster's tracking programs detected the purchase of more than 8,000 September 43 calls for $0.87 to $0.90. Volume was more than twice previous open interest of 3,378 from Tuesday's buying, which means that traders put even more money to work on the long side.

These calls lock in the price where shares of the natural-gas producer can be bought. Investors use the contracts to prevent stocks from running away from them at a fraction of the cost of buying the shares outright. Their relatively cheap price can also result in significant leverage on a percentage basis.

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Southwestern fell 1.21 percent to $37.57 yesterday, but is up 37 percent in the last year. The stock found support at its 200-day moving average early in January and February, but has bounced at its 100-day more recently. That suggests a potential acceleration of its bullish uptrend.

Total option volume was six times greater than average in the session, with calls outnumbering puts by 23 to 1.

—By CNBC Contributor David Russell

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Additional Views: Bulls Want FedEx to Deliver: Najarian

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Disclosures:

David Russell is a reporter and writer for OptionMonster. Russell has no positions in SWN.

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