NEW YORK -- Chesapeake Energy (CHK) has been ramping higher, and Thursday traders were betting on more upside.
OptionMonster's tracking systems found bullish trades in the November Weekly 28.50 calls that expire two weeks from today. More than 5,500 of the contracts changed hands, including a single print of 4,494 that was purchased for the ask price of 76 cents. The volume was far above the previous open interest of just 225, showing that this is fresh buying.
These calls lock in the price where the stock can be purchased, letting investors cheaply position for a rally and enjoy potentially significant leverage if one occurs.
Chesapeake shares rose 3.96% to $28.37 Thursday and are up 72% so far this year. The company is involved in the acquisition, exploration, development, and production of natural gas and oil.
Energy has been a standout theme for months in option trading, so it's not a huge surprise to see this name light up our scanners. Citi upgraded Chesapeake to a "buy" from "neutral" Thursday and raised its price target to $35 from $27.
Total option volume was twice its daily average for the last month. Some 33,600 calls traded versus about 18,600 puts, reflecting the session's bullish tone.
Najarian owns CHK calls.