Bulls drill for a gusher in Newfield
Options have been active in Newfield Exploration, and buyers were stepping in yesterday.
The September 25 calls lit up OptionMonster's trade scanners, with large blocks fetching $0.25 and then $0.30. More than 7,700 traded in volume well above the previous open interest of 3,100 contracts, so new money was definitely being put to work.
These calls lock in the price where the oil stock can be purchased, controlling moves to the upside at limited cost. They can also generate some extreme leverage if the shares move far enough.
Newfield has been trying to bottom out all year and yesterday rose 0.12 percent to close at $24.25. Energy has been hot recently, and yesterday's traders were looking for this stock to join in party.
Almost 8,800 Newfield options changed hands in the session, triple its normal amount. Calls made up 8,600 of those contracts, a clear indication of yesterday's bullish bias.
—By CNBC Contributor Pete Najarian
Options Trading School:
Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com. Najarian owns NFX calls.