This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bulls Think Ensco Is Down but Not Out

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.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%
TSLA $218.42 0.00%
YHOO $44.52 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports