Cabot Oil & Gas finished last week at all-time highs, and one long-term trade sees a lot more fuel left in its tank.
optionMONSTER's Heat Seeker system detected the sale of 3,100 January 60 calls for the bid price of $9.50 and the purchase of 3,100 January 75 calls for the ask price of $3.10. Volume was below open interest in the 60 calls but above it in the 75s, indicating that a position was being rolled higher.
The trader is selling the lower-strike calls, probably with a profit, and applying some of those proceeds to open a position at a level that is $15 higher--a highly bullish move. The new long calls , which lock in the price where the stock can be purchased, are looking for COG to surge above $75 by early next year. (See our Education section)
COG rose 2.31 percent on Friday to close at $63.40 after reaching an a lifetime high of $64.11 earlier in the session. The independent oil and natural-gas company gapped up from below $54 on Feb. 22 after issuing strong quarterly numbers, and shares have been rising sharply ever since.
The results were followed by bullish analyst reports at Jefferies, Baird, and Canaccord. The company's next earnings report scheduled for April 24 .
Cabot saw nearly 10,500 options trade in total on Friday, more than 8.5 times its daily average of 1,225 contracts in the last month. Overall calls outnumbered puts by 7 to 1.
More From optionMONSTER