Call seller sees Crosstex hitting a top


Shutterstock photo

Crosstex Energy has rallied back to a key level, and one investor appparently thinks that the top is in.

optionMONSTER's tracking programs detected the sale of 2,200 October 15 calls for $0.70 against open interest of 1,893 contracts. The trade obligates the investor to sell shares of the natural-gas pipeline company at the strike price--a level they haven't seen in almost three years.

XTXI closed flat on the day at $14.24. The stock peaked just below $15 at the beginning of August, plunged below $9 when the market crashed, then came roaring back to its old high. It now seems to be hitting resistance around that recent high, which could make some traders think that a double-top reversal pattern is taking shape.

By selling calls at the $15 level, the investor is expressing a belief that it will remain below $15. He or she could be a shareholder looking to earn income on a long position in the stock or a speculative short. (See our Education section)

Overall option volume in XTXI was 10 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: XTXI

More from optionMONSTER




Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by