Large position targets upside in Encana
Traders are looking for the uptrend to continue in Encana.
optionMONSTER's monitoring program shows that 9,000 January 11 calls were purchased in one print for $0.80 yesterday. This is clearly a new position, as volume was well above the strike's open interest of 1,312 contracts.
Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)
ECA rose 8.21 percent to $10.15 yesterday and is up 16 percent in the last three months. The oil and natural-gas producer is scheduled to report earnings before the market opens on Nov. 3.
Overall option volume was 3 times greater than average.
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