One trader thinks the Superior Energy is going nowhere in a
optionMONSTER's trade scanners detected the sale of 3,000 December
20 calls for $1.30 and 3,000 December 20 puts for $1.05. That
totals a credit of $2.35.
If SPN closes at $30 on expiration, the trader will keep the credit
as profit. Gains erode on either side of that level, turning to
losses below $27.65 and above $32.35. (See our
section for more on the position, known as a
SPN fell 2.6 percent to $20.24 yesterday and has lost more than
one-quarter of its value this year. The oilfield-servicing stock is
now back around the same levels were it found support in early
2010, which could make some chart watchers think that further
downside is limited.
Given nervousness about the broader economy, they could also expect
upside will be limited in the near term. If SPN does move sideways,
the calls and puts will both lose value to the normal process of
time decay as expiration draws near.
Total option volume was 11 times greater than average in the
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.