Encana has surged in recent weeks, and traders are betting that shares will continue their bullish momentum.
optionMONSTER's monitoring program shows that more than 9,900 May 7 calls were purchased for $0.35 to $0.45 yesterday. Volume was well above the strike's open interest of 2,209 contracts, an indication that new money was put to work.
Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)
ECA rose 3.05 percent to $6.09 yesterday and is up 38 percent in the last month. The natural-gas and oil producer reported bullish results on Feb. 24 and is expected to announce its next earnings numbers before the market opens on May 12.
Overall option volume in the name was twice its daily average yesterday. Calls outnumbered puts by a bullish 16-to-1 ratio.
More From optionMONSTER