Bulls fill up tanks with Spectra Energy


Spectra Energy has been trapped in a tight range for nearly two months, but traders are looking for shares to pop in the next month.

More than 5,000 January 28 calls traded in a strong buying pattern on Friday, led by a print of 2,732 that went for $0.40, according to optionMONSTER's Heat Seeker tracking system. The volume was well above the strike's open interest of 1,821 contracts at the beginning of the day, indicating new activity.

SE fell 0.97 percent on Friday to close the week at $27.54. The natural-gas pipeling and storage company has been trading between about $26.50 and $28 since early November.

Friday's long calls , which lock in the price where traders can buy the stock, are looking for SE to gain more than 3 percent by expiration in mid-January. The contracts could be sold at a profit earlier if their premiums rise with any rally before then, but they will expire worthless if the shares don't move. (See our Education section)

Those calls made up most of Spectra's total option volume 6,159 on Friday, nearly 4 times its daily average. Only 191 puts changed hands in the entire session, a reflection of the day's bullish bias.

optionMONSTER's systems also detected buying in the June 30 calls on Nov. 30.

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