By David Russell of OptionMonster
NEW YORK -- Devon Energy (DVN) has been blasting higher along with other shale names, and the bulls are looking for more.
OptionMonster's tracking systems identified heavy buying in the July 80 calls on Friday, with more than 16,000 trading for 80 cents to $1.19. The volume was well above the strike's previous open interest of 9,262 contracts, indicating that new positions were initiated.
Long calls lock in the price where investors can buy a stock, letting them cheaply position for a rally with limited risk. The contracts can also generate significant leverage if shares move in the right direction, but they can quickly lose value if the stock drops.
Devon shares gained 1.35% on Friday to close at $78.04, just off their session high. The oil and natural-gas producer has been trending steadily higher from below $65 in late March.
Total option volume in the name exceeded 25,600 contracts on Friday, more than triple its daily average for the last month. Overall calls outnumbered puts by a bullish 9-to-1 ratio.
Russell has no positions in DVN.
Select the service that is right for you!COMPARE ALL SERVICES
- $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
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV