Natural Gas Bulls Turn to Questar

Natural gas pipe and worker with fire silhouetted
Patti McConville | Image Bank | Getty Images

First it was Williams, and now the natural-gas bulls are looking to Questar.

OptionMonster's tracking programs detected heavy buying in the April 22 calls about halfway through Friday afternoon, with some 2,000 contracts initially bought for $0.25. Traders continued to pile in later in the session, pushing total volume to 3,964 at the strike — almost triple the previous open interest, indicating that this was new activity.

Calls lock in the price where investors can purchase stock, so they can generate some nice leverage if the shares rally. That's exactly what happened on Friday, as those calls inflated to $0.35 by the end of the session, a gain of about 40 percent versus a much smaller move in the share price.

Questar, which focuses on pipelines and storage in the western U.S., closed the session up 2.34 percent to $20.97. Earlier in the week, its much larger peer The Williams Cos. saw heavy activity in the August contracts as an investor looked to generate big leverage from a steady gain in the share price.

Total option volume in Questar was 15 times greater than average in the session. Calls outnumbered puts by a bullish 112 to 1.

—By CNBC Contributor David Russell

Additional News: How to Trade Natural Gas in 2013

Additional Views: Fortinet Puts Ring Up Quick Winners: Russell


Options Trading School:


David Russell is a reporter and writer for OptionMonster. Russell has no positions in STR or WMB.