SandRidge draws bullish 3-way spread

SandRidge Energy has been on a wild run higher recently, and a huge three-way spread is looking for even more gains.

More than 122,000 SD options have traded so far today, already about 6 times its daily average in the last month. A trader sold 12,000 June 6 calls for $1.59 against open interest of more than 28,000. At the same time, he or she bought 24,000 June 7 calls for $1.13 and sold two blocks of 12,000 June 9 calls for $0.50 and $0.49, with volume at each of those strikes above open interest.

The trader appears to be rolling June 6 calls, which are now in the money , up to the higher-strike vertical spread . The move doubles the size of the position while allowing the trader to take some money off the table in the process. (See our Education section)

SD is trading $7.24 this morning, up 6.6 percent on the day and on pace for its highest close since mid-October. Shares of the oil and natural-gas company were down at $5.50 on Nov. 28 and have gained very day since.

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