Option Bulls Think Ensco Is Down, but Not Out
"Fast Money" Contributor
has been drilled lately, but option traders are looking for a rebound.
OptionMonster’s tracking system showed volume surging in the July 46 calls yesterday, with blocks trading for $1.15. About 2,600 of the options traded — not huge, but well above previous positioning of just 131 contracts in the strike, indicating clearly that these are new positions.
Those callslock in the purchase price for the stock, so they can deliver major leverage if Ensco rallies. But these options will expire worthless in about a month if no move takes place.
Ensco shares provides contract drilling services to the energy industry, with rigs off Brazil, Europe, and Africa. The stock, already weakened along with most other oil and gas names, closed lower by 1.83 percent to $42.89 yesterday and is down more than 25 percent since late February.
Total option volume was twice its average daily amount in the session. Calls outnumbered putsby a bullish 12-to-1 ratio.
—By CNBC Contributor Pete Najarian
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