Magnum Hunter Resources has been rebounding in recent weeks, and one trader believes that the momentum will continue through Thanksgiving.
optionMONSTER's Heat Seeker system detected the purchase of 4,224 November 5 calls yesterday, mostly for $0.45, in the final 2 minutes of yesterday's session. The volume was above the strike's open interest of 3,476 contracts before the trade appeared, showing that this is a new position.
These long calls lock in the price where the stock can be purchased through mid-November no matter how far it might rise. They could be sold earlier if premiums gain with a rally before then, but the contracts could also expire worthless if shares remain below $5. (See our Education section)
MHR rose 4.09 percent yesterday to close at $4.84. Shares of the independent oil and gas producer barely budged after its earnings results on Aug. 12 but bounced sharply at the $4 level the following week.
Total option volume was just shy of 9,200 contracts yesterday, nearly 6 times its daily average for the last month.
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