NEW YORK -- MRC Global is a name that rarely sees unusual option activity, but the energy bulls discovered it Wednesday.
OptionMonster's tracking systems detected the purchase of almost 4,000 June 30 calls for 50 cents to 75 cents, along with 2,400 May 30s for 30 cents to 50 cents. Volume was far above the previous open interest in each strike, showing that this is fresh buying.
These calls lock in the price where the stock can be purchased no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, but the contracts will expire worthless if shares remain below $30 by their expiration dates in mid-May and mid-June.
MRC rose 3.28% to $27.42 on Wednesday and is breaking higher following a big selloff in February. The Houston-based company, which distributes pipes and valves used in the energy industry, will report earnings on May 1 after the market closes.
Total option volume in MRC was just shy of 7,000 Wednesday, compared to a daily average of just four contracts for the last month. Only 38 puts changed hands in the name, a reflection of the session's bullish sentiment.