Oil and gas pipeline play Enterprise Products Partners (EPD) is up 7% over the past year, but has given up gains in recent weeks amid the market selloff. One trader sees more upside by year-end.
That’s based on the December 2025 $36 calls. With 226 days until expiration, 6,000 contracts traded compared to a prior open interest of 184, for a 33-fold rise in volume on the trade. The buyer of the calls paid $0.26 to make the bullish bet.
Enterprise recently traded for about $30, so shares would need to rally by $6, or 20%, for the options to move in-the-money. The strike price of the option is also slightly over Enterprise’s 52-week high of $34.63.
Structured as a partnership, Enterprise is required to pay out most of its earnings as income to holders. The recent drop in shares has pushed the yield to just over 7%. Plus, Enterprise trades at about 11 times earnings.
Action to take: Income investors may like shares here, for their high yield. Typically, partnerships may have different tax considerations compared with common stocks, so check with an accountant.
For traders, shares are oversold in the short-term and could be ready to move higher. Option buyers don’t have to worry about any tax considerations on the income. The December 2025 calls have ample time to play out, and could see high double-digit returns given their low cost.
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.
