By David Russell of OptionMonster
NEW YORK -- The bulls were all over Consol Energy (CNX) on Tuesday after it crushed earnings estimates.
OptionMonster's tracking programs detected the purchase of almost 10,000 June 45 calls, most of which priced for $1.01 to $1.20. Volume dwarfed the strike's previous open interest of just 71 contracts, which indicates that new money was put to work on the long side.
Calls lock in the price where a stock can be purchased, letting investors cheaply position for a rally. They can also generate significant leverage from even a modest gain in the shares.
Consol's stock rose 4.72% to $43.93 on Tuesday. The company has been successfully transitioning from coal to shale energy and is now back to levels last seen in late 2011. Other companies in the oil and gas sector have also been strong, which is helping the stock as well.
Total option volume was five times greater than average in Consol Tuesday, with calls outnumbering puts by more than 10 to 1.
Russell has no positions in CNX.