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Hess draws bullish trade at highs

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Hess is hovering near two-year highs, and one trader is looking for another rally in the next six months.

optionMONSTER's Heat Seeker system detected the purchase of 2,000 February 75 calls for $5.30 to $5.45 in about 2 minutes Friday morning. This is clearly a new position, as its volume was above the open interest of 1,498 contracts before the trade appeared.

These long calls , which lock in the price where the stock can be purchased, are looking for HESS to trade above $80 in the next six months. They could be sold earlier at a profit if premiums rise with the stock price before then, but these in-the-money calls will rapidly lose value if the shares fail to move as February approaches. (See our Education section)

HES rose 1.54 percent to $75.66 on Friday. The energy company spiked to $76.34 on Aug. 1, its highest price since July 2011, after reporting second-quarter results. It has not closed above $80 since April 2011.

Total option volume topped 7,200 contracts on Friday, exceeding its daily average, as calls outnumbered puts by more than 4 to 1.

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