Bulls Look to Follow Nabors Higher

By Pete Najarian, co-founder of OptionMonster

NEW YORK -- Options have been bullish in energy companies for several weeks, and Monday it was Nabors Industries' (NBR) turn.

Nabors gained 3.02% Monday to close at $15.69, a penny off its regular-session high, then climbed another 0.45% after hours. The oil and natural-gas drilling company had been trapped mostly between $12.50 and $15 for three months until last week, when it broke above the top end of that range.

OptionMonster's tracking systems show that 3,683 September 17 calls were bought for 23 cents to 38 cents against open interest of 3,265 contracts. There was also sizable buying in the September 16 calls, which traded 2,728 times for 41 cents to 72 cents against open interest of 2,056.

These calls lock in the price investors must pay to buy the stock. They can generate major leverage if the stock rallies but will expire worthless if it doesn't.

Total option volume in the name was triple its daily average. Calls outnumberd puts by 5 to 1, a reflection of the bullish sentiment.

Najarian has no positions in NBR.

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.