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Bull bets on Continental Resources

Mike Yamamoto (mike.yamamoto@optionmonster.com)

A bullish trader is targeting Continental Resources before its earnings report this week.

optionMONSTER's systems detected the purchase of 1,500 September 105 calls for $1.65 and, at the same time, the sale of 1,500 September 90 puts for $1.45. Volume was well above the previous open interest at each strike, indicating new positions.

This combination spread is highly bullish because a rally would increase the value of the long calls while rendering the puts worthless. But the opposite would occur if the stock drops by mid-September, and the trader would face the obligation to buy shares if CLR falls below $90 in that time. (See our Education section)

CLR rose 1.87 percent on Friday to close at $98.07 after reaching an all-time high of $99.01 earlier in the session. The oil company is scheduled to announce second-quarter results on Wednesday after the close.

Total volume in the name on Friday was quadruple its daily average for the last month. 

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