Cobalt International Energy fell sharply yesterday, but the
bulls weren't deterred.
optionMONSTER's Heat Seeker monitoring system detected the purchase
of 10,000 October 30 calls for $2. An equal number of July 30 calls
was sold at the same time for $0.60, but volume was below open
interest in those.
It appears that an existing long position was closed in the July
contracts and rolled forward in time. Making the adjustment cost
$1.40 and provides the investor with an additional three months of
to the global energy company.
CIE is down 0.22 percent to $26.64 in afternoon trading but had
been working its way higher since bottoming at $20 in November. It
gapped lower yesterday after announcing that big institutional
investors would sell as many as 57.5 million shares.
The stock has been trying to holding its ground since the offering
priced. Some traders may think that it needs time to recover
following that drop, which could explain why the long position was
extended today. (See our
section for more on how options can be used to manage trades.)
More than 24,000 contracts have changed hands in the name so far
today, about 8 times its average amount. Calls outnumber puts by a
bullish 191-to-1 ratio.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.
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