Big Options Player Loves This Oil Services Stock
Goldman Sachs noted yesterday (Wednesday) that the energy sector has been outperforming in the last week, and the investment bank is looking for that trend to continue.
Schlumberger was also strong, but it was Halliburton that really stood out among oil and natural-gas drillers in the option market.
OptionMonster's tracking systems show that a trader rolled expiring July 52.50 calls up and out to the August 55 strike yesterday. More than 7,000 contracts changed hands yesterday, with the July contracts sold for $0.80 and the August callsopened for $1.30.
So the trader paid about $0.50 to avoid getting flushed out of the July options when they expire in just seven trading days. The new position is betting that the stock will trade above $56.30 — the $55 strike price plus the $1.30 option premium — by the August expiration.
Halliburton's shares closed yesterday up 0.98 percent at $52.66, its highest price in more than three years. (See tickerfor today's quotes.) Total volume in the stock was more than twice its average amount as calls dominated the activity, so it was definitely a bullish session.
Jon Najarian has long call spreads in HAL.
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Jon 'DRJ' Najarian is a professional investor, CNBC contributor, and cofounder of OptionMonster.com.