By Mike Yamamoto of OptionMonster
NEW YORK -- Option traders turned bullish on Nabors Industries (NBR) on Wednesday as oil-drilling names rebounded.
OptionMonster's tracking systems detected the purchase of 2,700 September 30 calls for 58 cents to 63 cents. The volume was more than 10 times its previous open interest, which indicates that new money was put to work.
These long calls lock in the price where the stock can be purchased through mid-September no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, providing potentially significant leverage, but the contracts will expire worthless if shares remain below $30.
Nabors rose 1.87% on Wednesday to close at $27.30 after bouncing sharply off its 30-day moving average, which has served as support all year. The company, which provides energy-drilling and rig services, reached $28.63 last Friday, its highest price since May 2011.
Total option volume in the name Wednesday was almost triple its daily average for the last month.
Yamamoto has no positions in NBR.