Range Resources given room to run

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Range Resources has been grinding higher, and one investor wants to give room to run.

optionMONSTER's tracking programs detected the purchase of 2,242 April 92.50 calls for $0.15 and the sale of an equal number of May 95 calls for $0.86. Volume was below open interest at the lower strike, which suggests an existing position was closed and rolled up.

He or she probably owns shares in the natural-gas producer and had sold the contracts as part of a covered-call strategy . Adjusting the trade let the investor collect an additional $0.71 of premium and raised by $2.50 the level at which they must eventually unload their stock. It also committed them to another month in the position. (See our Education section)

RRC is up 0.53 percent to $88.39 in afternoon trading. The stock started to rally in November, when it bottomed around $73, only to stall at $90 in late February. It's been stuck below that level ever since.

The next earnings report is scheduled for April 28, before those May 95 calls expire.

Total option volume is about 6 times greater than average so far in the session, with calls outnumbering puts by 72 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: RRC

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