How the bulls are playing Nabors

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Nabors Industries has pulled back, and the bulls are stepping in.

optionMONSTER's Heat Seeker monitoring system detected the purchase of 1,200 March 17 calls for $0.99 and the sale of an equal number of March 17 puts for $1.41. That translates into a credit of $0.42.

Owning calls locks in a price where shares can be purchased in the energy-drilling company, while selling puts generates income but compels the investor to buy the stock if it falls to a certain level. Combining the two strategies is highly bullish, resulting in a position that's similar to owning stock. (See our Education section)

NBR fell 1.30 percent to $16.65 on Wednesday and has been slowly working its way higher all year. The shares are now back to their $16.50 consolidation area from September, which could make some chart watchers expect a rebound. The stock is also near its 100-day moving average.

Overall option volume in the name was twice its daily average, with that bullish transaction accounting for more than half the total.

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