The bears drove Quicksilver Resources lower today, prompting one
big investor to take the other side of the trade.
optionMONSTER's tracking systems detected the sale of 7,000 May 14
puts on the company, which extracts oil and natural gas from
unconventional deposits. The trade priced for $0.75 and pushed
volume in the strike to 40 times greater than average.
KWK is down 4.14 percent to $14.11 in afternoon trading as it
continues to fluctuate in an increasingly tight range that has
persisted since October. The shares have been making incrementally
higher lows, a trend that today's put seller apparently expects to
The position reflects a belief that further downside in the stock
is limited from these levels, but because of the premium earned the
trade will make money as long as KWK stays above $13.25 by
The strategy will also benefit from the quickening pace of time
decay that will occur as expiration approaches on May 21. A similar
large put sale took place in January, though that trade apparently
KWK, which reported better-than-expected revenue and earnings on
March 1, is scheduled to release its next results on May 10.
Overall options volume in the stock is almost 5 times greater than
average so far today, with the put sale accounting for 96 percent
of the activity.
(Chart courtesy of tradeMONSTER)