Petrohawk Energy Corporation Snaps Its Short-Term Slump

Petrohawk Energy Corporation (HK) scored a slew of option volume on Tuesday, with call activity surging to three times the usual level. During the course of the session, traders on the International Securities Exchange (ISE) bought to open 6,006 calls on HK, compared to 106 puts.

In fact, speculators on this exchange have rarely shown a greater appetite for bullish bets on HK. The stock's 10-day ISE call/put volume ratio arrived today at 21.90, which ranks higher than about 98% of other such readings taken during the past year. In other words, traders have snapped up calls over puts at a faster pace only 2% of the time.

However, it's worth noting that short interest on the security has escalated of late. The number of HK shares sold short jumped by 16% during the past month, and now accounts for 2.6% of the equity's available float. In other words, some of the buy-to-open call volume could be the result of hedging activity by the shorts.

If so, those hedges were snapped up in the nick of time. HK has bolted higher today, breaking out of month-long slump on the charts. The stock was up 6.8% at last check, and it's currently poised to notch a daily close atop its 10-day and 20-day moving averages for the first time since Oct. 22.

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