Oil and gas exploration company Continental Resources (CLR) has seen shares soar in recent sessions, and is in a general uptrend. One trader sees the move continuing over the next few weeks.
That’s based on the March 2021 $30 calls. With 49 days until expiration, over 7,300 contracts traded against a prior open interest of 148, for a 50-fold rise in volume on the trade. The trader paid about $1.30 for each contract.
Shares trade around $22, so the option would require shares soar 36 percent higher to move in-the-money before expiration. The company still trades off its pre-pandemic high, but is still up substantially from its lows of last March.
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Earnings and revenue have been flat over the past year, but the stock trades right near the book value of its resource properties.
Action to take: Shares look attractive here. As the company doesn’t currently pay a dividend, the best bet is with an options trade. The March $30 calls are aggressive, but traders who are nimble should be able to nag mid-to-high double-digit trades well before the option expires.
Given the short timeframe on the options, traders looking for a larger prospective return may like the January 2022 $30 calls. While a bit pricier a trade at nearly $3.65 for a contract, it will give traders time for a longer-term uptrend to play out. It also stands a better chance of moving in-the-money.