Over the past few weeks, we have seen a slew of unusual options activity in oil and natural gas related names – Chesapeake Energy Company (CHK), Exxon Mobil (XOM), Marathon Oil (MRO), and Anadarko Petroleum (APC). Most recently, we saw a massive call buyer in Boardwalk Pipeline Partners early in Monday’s session.
A Little Background
Boardwalk Pipeline Partners (BWP, $16.20) is a master limited partnership based in Houston, Texas, provided midstream (transport, storage, processing) natural gas services to its customers. BWP stock has traded in a 52-week range of $11.99-$33.00. Shares have dropped precipitously in 2014 (down 36% YTD), but this was largely due to poor earnings (shares dropped from $24.09 to $13.01).
Big Size
At least one trader seems to believe BWP has a bright future. In Monday’s session, we saw a trader come in and buy 100,000 BWP Jan 2015 17.5 Calls for $1.35. Following this order, we saw another trade hit the tape for 25,0000 contracts in this same line. The initial order represents a $13.5 million investment to the long side, with the potential to control 10 million shares of stock. This is by far the largest order (by dollar amount) we have seen this year, and even more interesting in light of the other activity we have seen in this sector recently.
