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TheStreet Open House

Cheniere Bulls Clean Up in a Hurry

By David Russell, reporter at OptionMonster

NEW YORK --The bulls came back to Cheniere Energy (LNG) on Thursday after a long hiatus, and the move paid off almost instantly.

OptionMonster's tracking systems lit up with unusual activity in the October 34 calls late Thursday morning, with traders snapping up big chunks for 23 cents. We immediately flagged the trades in our chat room and via email to our subscribers, and it was a good thing we hurried.

Barely 10 minutes later, buy orders started hitting the stock, driving it up $1 from its level when the calls appeared. Those October 34s more than doubled to 50 cents in the process.

The long calls lock in the price where shares can be purchased in the natural-gas tanker company, letting investors cheaply control moves to the upside. And that's exactly what happened Thursday.

The energy stock ended the session up 4.2% to $30.04. Few names have seen option activity as lucrative as Cheniere has in recent years, providing winner after winner as the stock ascended in 2011 and 2012. One trade early this year quadrupled in value by March.

More than 32,000 of those October 34 calls would change hands by the end of Thursday's session, dwarfing previous open interest of just 12 contracts. Total option volume was 20 times greater than average in the name.

Russell has no positions in LNG.

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.

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