Forest Oil is drawing upside option activity after raising its production outlook earlier this week.
An option trader bought 5,000 August 33 calls in a single transaction for $0.50, according to OptionMonster's real-time tracking systems. The trade dwarfed the strike's open interest of just 364 contracts and the average call volume of a mere 10 a day.
The company's stock rose 1.57 percent yesterday to $31.11, coming within $1 of its 52-week high in morning trading. It was the fourth straight positive session for the shares, which have gained 9 percent since Friday.
The oil and natural gas company missed profit forecasts in its quarterly report Monday but raised its daily production estimates for 2010.
For the calls purchased yesterday to turn a profit, Forest Oil's stock must rise at least 7.7 percent before the options expire in just over two weeks. Overall calls in the name outnumbered puts at all strikes by more than 6 to 1.
Yamamoto does not hold significant shares in the company mentioned above.
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Mike Yamamoto is an analyst and writer for OptionMonster.