McMoRan Exploration rallied on a major oil discovery in January, only to fall back to earth in the last two months. Now the bulls are back.
lit up yesterday with heavy trading in the August 11 and 15 calls. A little more than an hour into the session, traders bought the lower strike for $1.70 and sold the higher strike for $0.69 as part of a call spread.
MMR fell 1.68 percent to close at $11.74 yesterday. It popped earlier this year after saying its Davy-Jones well could be one of the largest discoveries in decades on the Shelf of the Gulf of Mexico. Since then it has been knocked lower after cutting its production estimate on April 19 and because of the recent oil spill.
Yesterday's call buying was the first major bullishness in the name for a while and occurred as shares tested its 200-day moving average. The bears have also bet heavily against the stock, pushing short interest to 17 percent of the float in mid-April.
The largest trade was actually a sale of more than 4,000 May 11 puts for $0.60. Traders heavily sold the May 11 and May 12 puts, though most of the activity came against open interest.
More than 39,000 contracts traded overall in the name, six times the average daily level.
McMoRan Competes With:
Royal Dutch Shell
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Najarian has a long call spread on MMR.
Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of .