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Buyers seek fuel in Cheniere Energy

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Traders are betting that Cheniere Energy will break through current resistance levels near its highs for the year.

optionMONSTER's Heat Seeker system yesterday identified bullish trading in the January 17 calls, which saw more than 23,000 contracts change hands for prices ranging from $1.47 to $1.80. The volume was 3 times higher than the strike's open interest at the beginning of the day, indicating new activity.

LNG rose 1 percent yesterday to close at $18.20, not far from the 52-week high of $18.92 reached in late April. Shares of the liquefied natural-gas company were down at support around $14 barely a month ago.

Because yesterday's long calls are already in the money , they will track the stock price more closely and are similar to owning shares outright. But these options, which lock in the price where shares can be purchased, can provide significant leverage if LNG rallies while carrying much less risk if it falls.

Total option volume in the name double its daily average for the last month, with calls outpacing puts by 8 to 1. It was the second straight session of positive option activity for Cheniere, which saw heavy put selling on Wednesday.

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