Encana Corporation (ECA), together with its subsidiaries, is engaged in exploration for, development, production, and marketing of natural gas, oil, and natural gas liquids in Canada and the United States.  This is not the first time we’ve seen bullish activity in ECA and it seems that this trader has been right in the past.  Today a trader bought 15,000 ECA Oct 23 Calls for $.85.  This gives the trader the right but not obligation to buy 1.5 Million Shares of ECA at $23 between now and October.  Let’s break-down their trade a little easier.

Their Risk: $85 per 1 lot
Their Reward: Unlimited
Their Breakeven: $23.85
Cash Outlay: $1.275 Million

Restoration Hardware Holdings, Inc., together with its subsidiaries, engages in the retail of home furnishings. It provides bedroom, dining, upholstery, home office, and media furniture products and has over 2,100 full-time employees in the services sector.  Today we saw a trader sell their long March 55 calls and roll them to the Apr 65 line. This is a bullish trade and I think the stock will move higher on this unusual options activity.  This block also represented volume over 4 times the average daily option volume in RH.  If I did not want to put on an options trade I could buy the stock with a $6 stop, under the Ichimoku Cloud.

Possible Trading Ideas:
Buy Stock: $65.38
Stop: $59.38
Target #1: $68.38
Target #2: $71.38

Stop at Breakeven when Target #2 is hit:
Target #3: $74.38
Target #4: $77.38

YPF SA, an energy company that engages in the exploration, development, and production of crude oil and natural gas in Argentina.  I have traded this stock in the past, but I currently do not have a position.  Today we saw a trader buy 2,000 of the Jan 2015 30-40 bull call spreads for $2.85. This is a cash outlay of over $500,000.  A trader sees that YPF is breaking the Ichimoku Cloud on the daily chart and thinks it can move higher. This trader is likely expecting a slower more sustained move higher in YPF. If they were expecting a parabolic move higher they would have bought outright calls instead of call spreads. This is a bullish trade and this trader will make almost 300% returns if YPF closes above $40 on Jan 2015 expiration.

FuelCell Energy Inc. (FCEL) together with its subsidiaries, designs, manufactures, sells, installs, operates, and services stationary fuel cell power plants and I think that this sector will do very well this year.  However, the stock has doubled in the last 2 weeks.  I would be more inclined to buy a pullback  than to get long the stock here.  The stock has sold off 6 of the last 8 quarters on earnings.  Technically the chart looks great and I think it will go higher but I do not want to be buying inflated front month volatility so my trade will be:

Buy the July-March 3 Call Calendar Spread for $.60 debit

Risk: $60 per 1 lot

Reward: Unlimited if stock closes under $3 on March expiration, I will be long the July 3 Calls for $.60

The Bank of New York Mellon Corporation provides various financial products and services around the globe. The stock has been under performing the market, but I think it is time to rip to the upside. Today we saw a trader buy almost 10,000 BK Sep 35 Calls for $1.08 which was over 6.0 times the average daily options volume and controls over 1 million shares of stock. We continue to see bullish activity in the KRE, the regional banking ETF, and several other financial names. I bought these Calls for $1.09 as this trader is making over a $1 million bet in this stock.

Hawaiian Holdings, Inc (HA) is a company who maintains sole ownership of Hawaiian Airlines Inc. The company’s stock is currently trading around $13.60 in a 52 week range of $5.18-$13.80. The stock has had a great year so far with shares rallying over 41% year to date. Options action has been very bullish in HA throughout this year and yesterday a trader made a bet on the close that HA will continue higher through March expiration. Shortly before yesterdays close a trader bought 4,015 HA Mar 13 Calls for $0.45. HA was upgraded this morning at Deutsche Bank and the stock opened higher by over 4%. The calls the trader bought yesterday traded as high as a dollar so this trader doubled his money overnight on a 4% move in the stock. HA is selling off some after the close but this trade is still hugely profitable. This is a great example of how unusual options activity can telegraph moves in stocks.

Energen Corporation (EGN) is yet another company that we have seen bullish activity in today. It is an energy holding company, engages in the development, acquisition, exploration, and production of natural gas and oil. Today we saw a trader buy 1,000 EGN April 85 Calls for $2.55. This was 6.0 times usual volume and control the right but not obligation to buy 100,000 shares of EGN between now and April for $85. The chart looks great to the upside and I think it can approach its old 52 week high of $90.
Disclosure: I am long the 50 EGN April 85 Calls for $2.55 and will look to exit 80% of them by the end of the day.

Encana Corporation (ECA) engages in the exploration, development, production, and marketing of natural gas, oil, and natural gas liquids in North America. We have seen high levels of call activity for several days and today we saw a trader buy 2790 ECA March 20 Calls for $.35. This gives the buyer the right but not obligation to buy 279,000 shares above $20 by March expiration. The chart looks great as the stock is strongly breaking through $19.60 and I think the stock can push to its 52 week high of $20.55.
Now, lets look at a credit spread to take advantage of the increased volatility that is generated from a trader buying calls.

The Trade: Selling the ECA March 20-19 Bull Put Spread for $.45 Credit
Risk: $55 per 1 lot
Reward: $45 per 1 lot
Breakeven: $19.45

I like this trade, because I can make money if the stock is higher, lower, or even flat.