GO
Loading...

Option Bulls Get Energized With Halliburton

Thursday, 21 Jun 2012 | 6:04 AM ET
A Halliburton complex in far Southwest Houston occupies several acres of land Monday, July 17, 2006 in Houston. The oil services conglomerate posted second-quarter net income nearly double that of a year ago. (AP Photo/Pat Sullivan)
Pat Sullivan
A Halliburton complex in far Southwest Houston occupies several acres of land Monday, July 17, 2006 in Houston. The oil services conglomerate posted second-quarter net income nearly double that of a year ago. (AP Photo/Pat Sullivan)

Option activity in the energy sector has been unusual recently, and yesterday Halliburton joined the fray.

The August 33 calls lit up OptionMonster’s tracking systems yesterday, trading in large blocks for $0.34 up to $0.40. More than 10,000 contracts changed hands versus previous open interest of 265 contracts, so new money was definitely being put to work.

Those calls lock in the price investors must pay to buy stock in the oil-service company and will enjoy some nice leverage in the event of a rally. If it fails to go up, however, the options will expire worthless.

Halliburton shares rose 0.61 percent to $29.57 yesterday. Its quarterly stock performance has been brutal, with a drop of more than 20 percent earlier this month, but it’s been edging off those lows in the last week or so.

UBS recently recommended the name as part of an aggressive diversified stance in anticipation of reduced earnings risk, valuations, and higher oil prices. Transocean was also a favorite.

Calls outnumbered puts by almost 3 to 1 yesterday, reflecting the session’s bullish sentiment.

—By CNBC Contributor Pete Najarian

Additional News: 8 Stocks Benefiting From North America’s Energy Boom

Additional Views: Trader Brain Kelly’s Stealth Energy Play

___________________________

___________________________
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 Halliburton calls.

___________________________

Disclaimer

Featured