Pipelines have been active for a long time, and the bulls came back to Spectra Energy on Friday.
optionMONSTER's Heat Seeker monitoring system detected the purchase of some 7,700 July 31 calls, most of which priced for $0.60 and $0.65. Volume was almost 7 times previous open interest at the strike, indicating that new positions were initiated.
These long calls lock in the price where shares can be purchased in the Houston-based company, which gathers, processors, transports, stores and distributes natural gas. Investors use them because they're cheaper than buying shares, reducing losses in the event of a pullback. The contracts can also generate significant leverage if the stock rallies. (See our Education section)
SE rose 2.10 percent to $30.59 on Friday. The stock peaked around $32 last month before it followed the market lower. It then bounced at its 100-day moving average and around the same level where it peaked in February, which some traders may consider a bullish chart signal.
Total option volume was quadruple the daily average in the session, with calls outnumbering puts by almost 13 to 1.
More From optionMONSTER
- Investment & Company Information
- Spectra Energy