Carrizo gets a vote of confidence


Shutterstock photo

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 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)

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

More from optionMONSTER




Follow on:

Find a Credit Card

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