By David Russell, reporter at OptionMonster
NEW YORK -- The energy bulls are now turning to Weatherford (WFT) which has lagged the sector recently.
OptionMonster's tracking programs detected the purchase of almost 51,000 January 2014 20 calls Wednesday against previous open interest of just 492 contracts. Most of them traded in two large blocks for $1.05.
Calls lock in the price investors must pay to buy shares, so they can generate some nice leverage in the event of a rally. But these options will expire worthless if the stock doesn't move.The company, which provides equipment and services to energy drillers, saw its stock rise 2.31% to $12.82 Wednesday. The shares have been bottoming out between $11 and $12 since early June while other companies in the sector have ripped higher amid a surge of bullish option activity. Using calls that expire in 2014 gives the investor plenty of time for a rally, while avoiding big losses if the stock drops. Overall option volume was eight times greater than average in the name Wednesday. Calls outnumbered puts by a bullish 15-to-1 ratio. Russell has no positions in WFT.