Energy bulls turning to GMX Resources
GMX Resources has been beaten mercilessly in the last year but is now joining other energy names that have seen bullish option activity recently.
Buyers struck quickly as the July 1 calls lit up the Heat Seeker yesterday, paying $0.10 for more than 3,000 contracts. That's a huge trade for a name that averages just 109 options a day in all strikes combined.
Calls lock in the price of buying stock and can generate some nice leverage if it rallies. But they will expire worthless if it doesn't move. (See our Education section)
The shares climbed 7.84 percent to $0.95 yesterday after trading up to $1.02 earlier in the session. The stock gapped down from above $5 in August and has been drifting lower since then.
The company is an independent oil and natural-gas producer with interests in two oil-shale resources: the Williston Basin in North Dakota/Montana and the Denver Julesburg Basin, which targets the Niobrara Formation in Wyoming.
Total option volume in the name was 37 times greater than average in the session, with calls outnumbering puts by more than 4 to 1.
Disclosure: I own GMXR calls.
(A version of this post appeared on InsideOptions Pro yesterday.)
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