Sentiment has been worsening in the energy space after a big
run, and now the bears are hitting Concho Resources.
optionMONSTER's Depth Charge monitoring program detected the
purchase of more than 1,000 December 95 puts for $7.10. Volume was
more than 7 times previous open interest at the strike.
Owning those puts ensures the investor a minimum exit price of $95
for the independent oil-and-gas company. These options are
in the money
and will therefore provide significant leverage to a decline in the
share price. Such contracts are usually used by investors as a
speculative short rather than as a
because of their high cost. (See our
CXO is down 2.66 percent to $93.48 this afternoon. The stock has
been climbing since the summer along with most other energy
companies, but performance and sentiment have worsened in the last
two weeks amid increased worries about the global economy and
Europe's debt crisis.
Oil service provide Superior Energy also saw downside trades
earlier today. (See
Overall option volume is about triple the average amount in CXO so
far today. Puts account for almost two-thirds of the total,
according to the Depth Charge.
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