Calls Active After Forest Oil Raises Guidance

Options Unusual Activity

Calls Active After Forest Oil Raises Guidance

Posted September 13th, 2012 by The Options Insider in Unusual Activity

Shares of Forest Oil Corp. (FST) are moving higher this morning after the company updated 2H2012 guidance. Currently, FST is up by 3.41%, trading at $8.49.

The company said that it expects sales volume for the second half of 2012 to come in at 330-340 MMcfe/d. This is a 3% increase over guidance provided on July 9^th. Cap-ex for 2H2012 is expected in the range of $240-260 million, an increase of $50 million over previous guidance.

Options traders are snatching up upside calls today, pushing overall call volume to 5.73x normal volume with 17,687 contracts traded. The majority of the action is coming in October, where the $9 and $10 strike are active.

The Oct $9 call was purchased 1,595 times, on the offer, for $0.45. Volume has since risen to over 3,600 contracts; open interest on the strike is only 634 contracts.

The Oct $10 call saw the purchase of 5,036 calls, on the offer, for $0.20 early in the session. This was followed an hour later by the purchase of 3,452 contracts, on the offer, for $0.30. The strike is now bid $0.35, at $0.40. Volume is tipping 13,000 contracts on open interest of just 120.

Forest Oil Corporation is an independent oil and gas company engaged in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids in North America.