Oil and gas exploration company Antero Resources (AR) is up 19% over the past year, lagging the overall market. One trader sees the potential for shares to move higher into the middle of next year.
That’s based on the June 2025 $35 calls. With 267 days until expiration, 5,048 contracts traded compared to a prior open interest of 141, for a 36-fold rise in volume on the trade. The buyer of the calls paid $1.86 to make the bullish bet.
Antero shares recently traded for about $28.75, so the stock would need to rise by about $6.25, or about 22%, for the option to move in-the-money.
The strike price of the option is close to the stock’s 52-week high of $36.28, set back in June.
Despite a challenging year for energy prices, Antero’s revenues are up 4.3%. Profitability has been low, leading to shares trading at 111 times current earnings, but about 17 times forward estimates.
Action to take: Investors may like shares here, as oil prices look undervalued in the low $70 range. Any oil price spike should see a bit move higher for oil-related stocks. Natural gas also tends to perform strongly in the winter months and can be prone to price strikes depending on weather conditions and demand.
Antero does not currently pay a dividend.
For traders, the June $35 calls have ample time to play out, and could see high double-digit returns or better if energy prices see a spike higher at some point between now and next June.
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.