By Pete Najarian, co-founder of OptionMonster
NEW YORK -- Ensco (ESV) has been drilled lately, but option traders are looking for a rebound.
OptionMonster's tracking system showed volume surging in the July 46 calls Wednesday, with blocks trading for $1.15. About 2,600 of the options traded -- not huge, but well above previous positioning of just 131 contracts in the strike, indicating clearly that these are new positions.
Those calls lock in the purchase price for the stock, so they can deliver major leverage if Ensco rallies. But these options will expire worthless in about a month if no move takes place.The company provides contract drilling services to the energy industry, with rigs off Brazil, Europe, and Africa. The stock, already weakened along with most other oil and gas names, closed lower by 1.83% to $42.89 Wednesday and is down more than 25% since late February. Total option volume was twice its average daily amount in the session. Calls outnumbered puts by a bullish 12-to-1 ratio. Najarian has no positions in ESV.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV