Options Say...Look for Encana Reversal
Encana has run south in a hurry, but now the bulls expect a reversal.
The buyers started early yesterday, picking up the October 27 calls for $0.70, and kept going until the close when premiums had ascended to $0.95, according to OptionMonster's tracking systems. Volume pushed above 18,000 in the strike against previous positioning of just 221 contracts.
ECA started the session with a bounce, pulled back, and then finished strong with a 5.06 percent gain at $24.48. The company, which engages in the exploration, production, and marketing of natural gas, traded over $30 before the recent selloff.
Calls outpaced the puts by more 24,000 to about 3,300, and overall volume was 6 times greater than average.
—Najarian owns ECA shares.
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