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Options traders are targeting an obscure Canadian energy stock as oil pushes to its highest level in over four months.
Check out the surging call volume yesterday in Cenovus Energy (CVE), which extracts crude oil from the sands of Alberta province:
Calls fix the entry price on a stock. That can result in significant leverage if a rally occurs, letting investors profit from a move in the shares with limited capital at risk. See our Knowledge Center for more.
CVE rose 5.2 percent to $9.13 on Monday. It’s been steadily making higher lows since drawing bullish call volume on February 13. Some technicians may view that price action as a bullish triangle, with the potential for more upside if resistance is broken.
The bullish call roll came as crude oil futures (@CL) rose more than 2 percent to close above $61.50 for the first time since November 9. A combination of better-than-feared economic news, plus supply cuts by OPEC and domestic producers, is helping drive prices higher.
Overall options volume in CVE on Monday was about 7 times the past month’s average, according to TradeStation data. Calls outnumbered puts by more than 150 to 1.
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