Unusual Options Activity: Coterra Energy (CTRA)

Oil and gas exploration company Coterra Energy (CTRA) is down about 5 percent over the past year. One trader is betting on shares to rally in the months ahead.

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  • That’s based on the April 2024 $31 calls. With 191 days until expiration, 4,955 contracts traded compared to a prior open interest of 194, for a 25-fold rise in volume on the trade. The buyer of the calls paid $1.55 to make the bullish bet.

    Shares recently traded for about $28, so they would need to rise about $3, or about 11 percent for the option to move in-the-money. The strike price would also be near the company’s 52-week high of $31.76.

    The energy company is still reeling from this year’s energy market, with revenues off by 55 percent, and earnings down by 83 percent.

    However, shares trade at about 7 times earnings, and with energy prices trending higher in recent months, Coterra could move back to profitability.

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  • Action to take: Investors may like shares, which have strongly rebounded from a recent selloff. Coterra currently pays a 3 percent dividend.

    For traders, the April calls have ample time to play out, and don’t need much in the way of a big move higher for the options to move in-the-money. They can likely deliver high double-digit gains before expiration.


    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 of the companies mentioned in this article.

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