Bulls targeting Superior Energy


Superior Energy Services has been bleeding lower since May, but the bulls were active yesterday.

optionMONSTER's Heat Seeker program detected the purchase of more than 2,000 June 20 calls, most of which priced for $4.80 and $4.90. There was no open interest before the trades appeared, so new money was clearly put to work on the long side.

These long calls lock in the price where a stock can be purchased, letting investors cheaply control a move to the upside. The contracts will behave very similar to owning the equity but can provide significant leverage, appreciating about $0.85 for every $1 the shares climb. (See our Education section)

SPN rose 0.21 percent to $24.36 yesterday. The provider of oil-field services has fluctuated between $23 and $29 since the start of last year, but some investors might think that the stock is attractive because it trades for less than book value.

Total option volume in the name was 10 times greater than average in the session, with calls outnumbering puts by a bullish 24-to-1 ratio.

(A version of this post appeared on InsideOptions Pro yesterday.)

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