Call sellers look for limited NRG gains

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Earlier in the month they wrote puts on NRG Energy, and now traders are selling calls in the electricity generator.

optionMONSTER's tracking systems detected a surge of activity in the April 20 contracts, which traded more than 4,000 times for $0.65. Volume was 12 times open interest in the strike.

NRG fell as soon as the transactions occurred but then pushed higher and is now up 1.27 percent to $20.38 in morning trading. The shares have languished over the last two years as the rest of the market rallied, but recently have been showing signs of bottoming out.

The stock fell after a poor earnings report on Feb. 22, although management said that it would meet full-year expectations. It bounced this month at a higher level than its December low, and put sellers appeared on March 2, betting it would remain above $19.

Today's call sellers apparently think that NRG is not yet ready to rally. Their trades will make money if it remains below $20.65 through April 15.

Overall option volume is about 4 times greater than average so far today.




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.

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


This article appears in: Investing , Options

Referenced Stocks: NRG

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As of 12/24/2014, 02:12 PM


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