This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Energy Bulls Clean Up in Anadarko

By David Russell of OptionMonster

NEW YORK -- Anadarko Petroleum (APC) exploded higher Thursday, and traders made a killing from the move.

On Monday, the embattled oil driller was recommended on OptionMonster's Market Action Webinar. Then our Heat Seeker tracking system detected highly bullish option activity the next day, with 10,000 April 90 calls bought for about 50 cents.

The stock moved sideways on Wednesday but surged as much as 16% Thursday after the company announced that it would settle an environmental lawsuit for $5.15 billion. That removed uncertainty from Anadarko, allowing it to participate in a broader rally that's been taking shape in the energy sector.

Must Read: Energy Bulls Focus on Occidental

While impressive, the move in the share price was nothing compared with profits of more than 1,300% reaped by holders of those April 90 long calls. Other traders rolled winning positions higher in May calls, selling the 95s for $4.20 and buying the 105s for $2.

Yet another investor opened a bullish call spread. This trader waited for a pullback, then bought the May 105s for $1.22 and sold the May 115 calls for 10 cents.. That position will earn 793% on a move to $115 or higher.

Overall option volume was 14 times greater than average in the name Thursday. Calls accounted for a bullish 92% of that total.

Anadarko shares ended Thursday up 14.51% to a record closing high of $99.02. At one point in the session the stock touched $100 for the first time ever.

Russell has no positions in APC.

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.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 -1.15%
FB $117.58 0.73%
GOOG $693.01 0.29%
TSLA $240.76 -2.81%
YHOO $36.60 0.03%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports