Bulls Give Questar Time to Rally

By David Russell, reporter at OptionMonster

NEW YORK -- The bulls have already cleaned up in natural-gas company Questar ( STR), and Wednesday they came back for more.

OptionMonster's tracking programs detected the purchase of more than 3,000 July 26 calls, most of which priced for 30 cents. Volume was almost twice the strike's previous open interest, which indicates that new money was being put to work.

These calls lock in the price where shares can be purchased, so they have the potential to generate significant leverage if the stock rallies. They also provide upside exposure at a low cost, limiting the amount of money that can be lost in a pullback.

Questar fell 1.69% to $24.96 Wednesday but is up 26% so far this year. It also lit up our monitors back in January and February, throwing off profits of more than 100% as the shares advanced.

Total option volume was seven times greater than average in the session, with not a single put trading all day.

Russell has no positions in STR.

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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