Bulls Drill for a Gusher in Newfield

By Pete Najarian, co-founder of OptionMonster

NEW YORK -- Options have been active in Newfield Exploration ( NFX), and buyers were stepping in Tuesday. The September 25 calls lit up OptionMonster's trade scanners, with large blocks fetching $0.25 and then $0.30. More than 7,700 traded in volume well above the previous open interest of 3,100 contracts, so new money was definitely being put to work. These calls lock in the price where the oil stock can be purchased, controlling moves to the upside at limited cost. They can also generate some extreme leverage if the shares move far enough. Newfield shares have been trying to bottom out all year and Tuesday rose 0.12% to close at $24.25. Energy has been hot recently, and Tuesday's traders were looking for this stock to join the party. Almost 8,800 Newfield options changed hands in the session, triple its normal amount. Calls made up 8,600 of those contracts, a clear indication of Tuesday's bullish bias.

Najarian owns NFX calls

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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