Scrap Metal Options Trade
by Bradley Voight on 08/19/13I went to the scrap yard last week just to make some room in the garage. I made $72 for some cans, insulated wire, and 200 pounds of iron. On Monday I bought 2 call option contracts for September on a company called Halcon Resources, an oil driller in the Bakkan shale in North Dakota. On Friday August 8 company insiders purchased 610,000 shares @ $5.10 worth over 2 million dollars. Even the human resources vice president bought 20,000 shares. I splurged, I bought 2 call option contracts for 30 bucks. Each contract represents the right but not the obligation to buy 100 shares of the stock at the strike price at a future date, which I chose as $6. You can click here to see the September options for Halcon on Yahoo finance. The options expire Septermber 21, which means they either have to be exercised or sold by that date. I plan to sell them before expiration as I do not have $1200 it would cost to buy 200 shares @ $6 apiece. The reasoning behind my purchase is that I think the insider buying and the large number of open call contracts in September, October, and beyond signify a coming move to the upside in the stock price. I just hope the move happens in September.