On Wednesday crude oil surged to a three-year high, and traders are making a big bet on one energy name in particular.
Bullish investors bought more than 12,000 Anadarko Petroleum calls at the May 65 strike price, according to "Halftime Report" trader Jon Najarian.
The calls expire on May 18, so as long as the stock trades above $65 by then, the investors can exercise their right to buy the stock and collect a profit (minus their cost to purchase the option).
Anadarko closed at $63 on Tuesday, so it will need to rise 3.17% to reach that key $65 level.
As more investors have scrambled into the trade, the price of this particular contract has bounced. It's now trading at $1.93 per contract, compared to just $0.76 at the end of last week.
Traders are also making a fast money bet on chip-maker Marvell Technology, according to Investitute.com co-founder Pete Najarian. Today they bought more than 5,000 calls at the April 22 strike price. These particular calls expire on April 27.
The price on this specific contract has sky-rocketed 335% in the past two days. On Monday it cost $0.20, compared to $0.87 today.
Najarian believes the buying in this name is indicative of an overall trend in the sector, commenting that "the chip space is starting to come back."
Jon Najarian owns Anadarko Petroleum calls.