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Range Resources bull buys time

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Range Resources reports earnings early next week, and one bullish trader is apparently buying more time to see the results.

optionMONSTER's Heat Seeker system detected the sale of 2,000 February 85 calls for $1.55 and the purchase of 2,000 March 85 calls for the ask price of $4.30 this morning. Volume was below previous open interest in the near-term contracts, which expire tomorrow, but above it in the March strike.

The trader appears to be rolling a position one month forward, closing the expiring calls and buying the March contracts for a net price of $2.75. The new long calls are looking for a rally by expiration four weeks from tomorrow but will quickly lose value if shares don't move higher soon. (See our Education section)

RRC is down 0.95 percent to $86.75 this morning. The natural-gas producer, which was cited on our proprietary Market Action webinar last week, has been trending higher with its 50-day moving average as support since November but has been range-bound in the last month.

The company is scheduled to release fourth-quarter results on Tuesday after the close.

Today's call roll makes up almost all of the option volume in the name so far, which is already double its full-session average. Overall calls are outpacing puts by 6 to 1.

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