Options have been bullish in energy companies for several weeks, and yesterday it was Nabors Industries’ turn.
Nabors shares gained 3.02 percent yesterday to close at $15.69, a penny off its regular-session high, then climbed another 0.45 percent after hours. The oil and natural gas drilling company had been trapped mostly between $12.50 and $15 for three months until last week, when it broke above the top end of that range.
OptionMonster’s tracking systems show that 3,683 September 17 calls were bought for $0.23 to $0.38 against open interest of 3,265 contracts. There was also sizable buying in the September 16 calls, which traded 2,728 times for $0.41 to $0.72 against open interest of 2,056.
These calls lock in the price investors must pay to buy the department store company’s stock. They can generate major leverage if the stock rallies, but will expire worthless if it doesn’t.
Total option volume in the name was triple its daily average. Calls outnumberd puts by 5 to 1, a reflection of the bullish sentiment.
—By CNBC Contributor Pete Najarian
Additional News: Nabors Posts Second-Quarter Loss on Write-Downs
- More Options Tips From Pete Najarian
- Options Tips From Jon Najarian
- Read the CNBC Stock Blog
Options Trading School: