Bulls pile in as Halcon surges
Energy is surging again today, and sentiment is especially bullish toward Halcon Resources.
optionMONSTER's Heat Seeker monitoring program shows that traders have snapped up more than 8,000 July 6 calls for $0.20 to $0.30. Open interest stood at just 1,188 contracts before the session began, so new money was clearly put to work.
Long calls lock in the price where a stock can be purchased, letting investors cheaply position for a rally. They can also generate significant leverage but can expire worthless if shares stall or pull back. (See our Education section)
HK is up 10.11 percent to $5.01 in afternoon trading and has risen 34 percent since being recommended on our proprietary Market Action webinar last month. There's no clear reason that the Houston-based oil driller is rallying, but it's following gains in other domestic-energy companies.
Goodrich Petroleum lit a fire under the group after reporting strong results from a test well in the Tuscaloosa Shale. GDP, which came into the session with a massive short interest, rallied 36 percent. Another shale play recommended on Market Action recently, Comstock Resources (:CRK), is rallying about 8 percent today.
Total option volume in HK is quadruple its daily average so far today, with calls outnumbering puts by about 20 to 1.
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