Slowly but surely, buyers are returning to coal miner Consol
optionMONSTER's Heat Seeker monitoring system detected the purchase
of 2,500 November 33 calls for $1.91 and the sale of 3,750 November
36 calls for $0.76. Volume was more than quadruple open interest at
call vertical spread
will earn a maximum profit of 290 percent if CNX closes at $36 on
expiration. Gains will erode above that level.
That varying performance is caused by the greater number of calls
sold at the higher strike. This generates additional income to
lower the cost of the position but creates risk if the shares rally
too much. The strategy is also known as a
because the number of contracts sold exceeded those bought by a
CNX fell 0.79 percent to $32.85 yesterday but has been grinding
higher since the summer.
significantly underperformed the market in the first half of 2012
as investors priced in weak global growth.
The investor's choice of a ratio spread
, which is designed to maximize gains from a gradual move, shows
that investors don't expect a runaway rally in the name. A similar
strategy appeared in the January contracts
Overall option volume in CNX was below average yesterday, but calls
outnumbered puts by more than 5 to 1.
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.
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