Oil and gas exploration company Antero Resources (AR) sank 20 percent in 2023, as energy prices trended down compared to the prior year. One trader sees a move higher in the coming weeks.
That’s based on the February 16 $20 calls. With 44 days until expiration, 7,006 contracts traded compared to a prior open interest of 267, for a 26-fold rise in volume on the trade. The buyer of the calls paid $3.35 to make the bullish bet.
Antero Resources recently traded for just over $22.50, making the options just over $2.50 in-the-money.
The stock has shot higher in recent weeks, having traded near $20 in mid-December, a price point with strong support for shares over the last year.
Operationally, Antero has struggled with profitability, as earnings dropped over 90 percent and revenues dropped nearly 60 percent in 2023.
Action to take: Investors betting on a resurgence in oil prices may like shares here.
Plus, as a mid-cap company, Antero could see some takeover interest. 2023 saw an above-average year for M&A activity in the energy sector.
Currently, Antero does not pay dividends.
For traders, the February calls play to the current short-term trend underway in shares. That trend may fizzle out in the coming weeks, so interested traders may want to buy now and look for quick mid-double-digit profits.
Aggressive traders may want to look for an out-of-the-money trade.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.