Buyers hope for gusher in FX Energy
FX Energy has fallen more than 60 percent in the last eight months, but its shares surged with bullish option trading yesterday.
More than 2,000 September 5 calls were bought as premiums rose from $0.15 to $0.35. The volume was nearly double the strike's open interest of 1,118 contracts before the session began, indicating new activity.
FXEN soared 27.04 percent yesterday to $3.43 after reporting positive signs in early exploration at a key drilling site in Poland, where the company primarily operates. Shares closed at their 50-day moving for the first time since early March but are still a far cry from their 52-week high of $8.78 reached last September.
Yesterday's long calls , which lock in the price where traders can buy the stock no matter how far it might climb, are looking for shares to rally above $5 in the next five months. That would be a gain of another 50 percent, back to levels not seen since early November. (See our Education section)
Total option volume in the name exceeded 4,900 contracts yesterday, compared with a daily average of just 212 contracts in the last month. Calls outnumbered puts by more than 10 to 1, a reflection of the session's bullish sentiment.
The Salt Lake City-based oil and natural-gas company has not yet scheduled its next earnings report.
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