Southwest Energy (SWN) adds $1.21 to $35.74 and is on 10-day 17.5 percent winning streak. More than 108,000 call options have traded on the stock Thurdsay. March 34 and 36 calls, which have both traded more than 40000 contracts, are the most actives. Some investors are possibly rolling in-the-money calls to out-of-the-moneys after the stock’s run higher. Open interest in the Mar 34s is 62,444 contracts and the largest position in SWN. Some of the flow is also part of a more complex strategy that also traded yesterday, which involved buying Feb 31 calls and selling the Mar 34 – 36 calls spread. It appears to be an adjustment to trades earlier this month (see 2/13 color). Earnings come into play on Feb 27.
About the Author (Author Profile)
Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.