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Chevron May Buy NatGas Company: Hedge Fund Traders

Monday, 6 Jun 2011 | 10:52 AM ET

Options activity on Friday was wildly bullish in Southwestern Energy, which was the subject of takeover talk last week.

More than 26,000 calls changed hands versus less than 2,800 puts, according to OptionMonster's tracking systems. The June 45 calls accounted for almost half the activity, trading for $0.23 early, but closed the session at $0.57 as SWN pushed higher.

Hedge fund traders cited Chevron as a potential buyer for the natural-gas company. Southwestern is valued at about $15 billion, not small potatoes but also very doable for a giant such as CVX, which has that much cash on its balance sheet right now.

SWN shares rose 3.58 percent to $43.73 on Friday. (See tickerfor today's quotes.) The company produces and markets natural gas, with its main focus on developing the unconventional Arkoma Basin deposit in western Arkansas.

More than 29,000 contracts traded in the name, which is 8 times more than average.

Disclosures:

Jon Najarian has no positions on SWN.

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Options Trading School:

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More NatGas Players:

Chesapeake Energy

Anadarko

Exxon Mobil

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Options Trading School:

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Jon 'DRJ' Najarian is a professional investor, CNBC contributor, and cofounder of OptionMonster.com.

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