Investor wants a hedge in Patterson

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One investor is keeping protection in place as Patterson UTI Energy attempts to work its way higher.

optionMONSTER's Depth Charge tracking system detected the purchase of 3,000 February 20 puts for $0.61 and the sale of an equal number of February 18 puts for $0.26. Volume was below open interest in the 18s, indicating that a position established at an earlier date was rolled higher.

The investor is probably using the puts to hedge a long position in the drilling company. He or she paid $0.35 to adjust the strategy and in return increased by $2 the level at which they are protected to the downside. (See our Education section)

PTEN rose 3.54 percent to $21.93 yesterday. It's been shuffling sideways since the market crashed over the summer but has recently broken above its 100-day moving average. That could be leading some chart watchers to believe that it's ready to continue higher.

The company is scheduled to report earnings before the bell on Feb. 2, so the investor may want to guard against a drop on the news.

Overall option volume was 6 times greater than average in the stock, with puts outnumbering calls by 13 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.

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


This article appears in: Investing , Options

Referenced Stocks: PTEN

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