The new year has not been particularly kind to shares of Carrizo
Oil & Gas, but one trader apparently believes that the energy
company's downside is limited.
optionMONSTER's tracking programs detected the sale of 2,500 July
25 puts on the energy exploration company for $1.55. Volume was
more than 49 times open interest in the strike.
CRZO fell 3.25 percent to $31.56 yesterday. The stock more than
doubled between early July and the end of 2010 but has been pulling
back so far this year.
The April 25 strike price is below CRZO's peaks in late 2009 and
early 2010, which some chart watchers may expect to provide support
if it drops further. The put selling indicates that trader investor
would be willing to own the stock for $25 if it falls below that
level. (See our Education section)
The company operates in the emerging shale segment of the energy
industry, which has recently been popular among investors in the
sector. It has been concentrating its efforts in shale deposits
since the Gulf of Mexico drilling moratorium and recently issued
senior debt to retire convertible bonds--a move tantamount to
buying back stock.
Total option volume in the stock was 13 times greater than average
in the name yesterday.
(Chart courtesy of tradeMONSTER)
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