By Mike Yamamoto of OptionMonster
NEW YORK -- Bullish option traders are charging into Occidental Petroleum (OXY)before it reports earnings in two weeks.
OptionMonster's tracking systems show that about 18,000 April 95 calls were sold for 81 cents to $1.71 on Thursday while roughly 36,000 August 105 calls were bought mostly for $1.25 to $1.88. Volume was below previous open interest in the near-term contracts but above it in the August calls, indicating that positions were rolled forward and doubled in size.
Traders were closing the April contracts before they expired at the end of last week and opening larger positions four months later at a strike that is $10 higher. The new long calls lock are looking for OXY to rally above $105 by mid-August but will expire worthless if shares remain below that level.
OXY rose 0.82% to $96.60 on Thursday but has been stuck in a range for more than a year. Other energy stocks have started to move, and now the bulls are turning to this oil and gas producer ahead of its first-quarter release on the morning of May 5.
Total option volume in the name was six times its daily average for the last month. Overall calls outnumbered puts by more than 14 to 1, a reflection of the session's bullish sentiment.
Yamamoto has no positions in OXY.