Call seller goes to work on NRG Energy

By David Russell,

Shutterstock photo

Someone's squeezing a few pennies from NRG Energy.

optionMONSTER's monitoring systems detected the sale of more than 8,000 January 25 calls against open interest of 6,781 contracts. They initially priced for $0.30, but then premiums fell to $0.25 as the selling continued.

The trades were probably done by an investor who owns shares in the power-generation company and was looking to earn some income from the passage of time . By writing the calls, they're agreeing to sell their shares for $25 if NRG rallies to that price by expiration. (See our Education section)

NRG rose 3.29 percent to $21.69 yesterday and has mostly fluctuated between about $20 and $25 all year. Given that trading range, some chart watchers may be expecting resistance around $25 and be willing to exit around that level.

Yesterday's call selling came after NRG missed revenue expectations but raised the lower end of its full-year EBITDA guidance.

Overall option volume in NRG was 13 times greater than average in the session.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.

This article appears in: Investing Options
Referenced Stocks: NRG

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