By David Russell of OptionMonster
NEW YORK -- Kodiak Oil & Gas (KOG) has been on a monster run recently, and buyers piled in when the stock pulled back on Wednesday.
OptionMonster's trade scanners detected the purchase of about 7,000 January 14 calls, with the largest block of 5,000 fetching 65 cents. The volume was far above the strike's previous open interest of 1,386 contracts, so new money was definitely put to work.
These long calls lock in the price where shares can be purchased, letting investors leverage a rally. That way they can cheaply position for gains, risking much less capital than they would by buying the stock directly.
Kodiak shares fell 3.9% to $12.80 Wednesday but have gained 35% in the last three months as investors have piled into domestic energy producers. Before September it had never traded over $11.
Total option volume in the name was triple the daily average in the session, with calls outnumbering puts by more than 6 to 1.
Russell has no positions in KOG.