By David Russell, reporter at OptionMonster
NEW YORK -- Nabors Industries (NBR) has been holding long-term lows, and one large buyer is positioning for a gradual rebound.
OptionMonster's trade scanners detected the purchase of 5,000 January 2015 20 calls for $1.70 Wednesday. The volume dwarfed the strike's open interest of just 53 contracts at the beginning of the day, so this is clearly a new position.
The calls lock in a $20 entry price in the stock in the next 25 months. Those options will increase in value if the shares rise, potentially resulting in significant leverage relative to the underlying shares.The stock rose 2.9% to $14.20 Wednesday and has lost 18% of its value so far in 2012. The energy driller has managed to stay above its lows from earlier in the year, which could be leading some traders to expect a rally in the belief that it's at support. Wednesday's call buying dominated option activity in the name, which typically sees volume of fewer than 1,200 contracts per session. Calls outnumbered puts by 5 to 1. Russell has no positions in NBR.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $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
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV