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Bullish strategy in Whiting Petroleum

David Russell (david.russell@optionmonster.com)

Someone is using an unusual bullish strategy in Whiting Petroleum.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 2,500 June 50 calls for $3.10 and the sale of 2,623 March 45 puts for $0.40. Volume was more than twice open interest at both strikes, indicating that new positions were initiated.

The trade cost about $670,000 and performs differently to the upside and downside over various time periods. The position is mostly bullish, with the potential to leverage a rally over the next four months, but it can also lose money if the shares drop in the next three weeks because of the short position in the puts.

The investor apparently thinks that the Denver-based energy company may rally by the spring but is also worried about a drop in the shorter term. (See our Education section for more on how to time moves using options.)

WLL is up 2.13 percent to $49.29 in midday trading and has risen 13 percent so far this year.

Total option volume is 4 times greater than average so far today.

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