Bulls Bet Cameron Will Keep Running

By David Russell of OptionMonster

NEW YORK -- Cameron (CAM) has been running for months, and the bulls were looking for more upside on Thursday.

OptionMonster's tracking systems detected the purchase of more than 11,000 January 75 calls in the session, most of which priced for $2.05 and $2.10. Volume was more than 40 times the previous open interest in the strike, which indicates that new money was put to work.

These long calls lock in the price where investors can buy shares in the Houston-based provider of oilfield services. They provide cheap upside exposure and help manage risk, so they make a lot of sense with earnings due next Thursday before the opening bell. But if shares remain below $75 through mid-January, these contracts will expire worthless.

Cameron shares fell 0.73% to $69.09 Thursday but is up 16% this year. Total option volume in the name was 13 times greater than average in the session, with calls outnumbering puts by a bullish 20-to-1 ratio.

Other energy names including Noble, Ensco, and Kinder Morgan Energy Partners also saw bullish activity Thursday.

Russell has no positions in CAM.

 

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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