GO
Loading...

Bulls Are Coming Back to Oneok

David Russell | Writer, OptionMonster
Tuesday, 9 Jul 2013 | 5:26 AM ET
Natural gas pipelines
Getty Images
Natural gas pipelines

The bulls are pouring into Oneok as the pipeline company tries to bounce from long-term support.

OptionMonster's tracking programs detected unusual volume in the August 45 calls yesterday, with buyers paying $0.45 and $0.50 halfway through the morning. Volume quickly ratcheted above previous open interest of 142 contracts, indicating that new money was put to work. More than 6,300 calls eventually changed hands in the strike.

These calls lock in the price where shares can be purchased, providing investors with a relatively inexpensive way to profit from gains. That way they risk only a fraction of the stock's value, which limits the amount of money they can lose in the event of a selloff.

Gulf Oil CEO on Keystone Pipeline
Joe Petrowski, CEO of Gulf Oil, provides his perspective on the continuing controversy over the Keystone XL pipeline. Also, Petrowski weighs in on why oil prices are still so high, explaining "we haven't done the complete switch from oil to natural gas."

Oneok pushed higher after the trades hit and ended the session up 3.55 percent to $41.42. The August 45 calls, however, doubled to $0.95, which shows the kind of leverage that can be achieved with options.

Oneok produced some winning option trades earlier in the year but is now back near its lows from 2012. Pipelines have been weak for the last few months, but the longer-term trend in the group remains bullish as the domestic energy story takes hold.

Overall option volume was 12 times greater than average in the name yesterday. Calls accounted for more than four-fifths of the total.

—By CNBC Contributor David Russell

Additional News: Here's How to Trade Oil Given the Egypt Crisis

Additional Views: Oneok Gainsas Pipelines Stay in Focus: Russell

___________________________
Options Trading School:

___________________________
Disclosures:

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

___________________________

Disclaimer

  Price   Change %Change
OKE
---

Featured