One investor wants to give Quicksilver Resources more time to
optionMONSTER's tracking systems detected the sale of about 20,000
June 6 puts for $1.07. An equal number of March 6 puts were bought
at the same time for $0.68, but volume was below open interest in
the strike. This suggests that they had previously been sold to
Given that KWK has failed to rally, the trader is rolling the
position forward in time to avoid being forced to buy shares in the
beaten-down energy stock at the end of next week. The investor
collected a credit of $0.39 in the process but must also stay in
the trade for an additional three months and remain exposed to
downside in the stock.
KWK rose 5.22 percent to $5.44 on Friday. The oil and gas company's
shares have lost more than half their value since last summer, when
management announced a big capital spending plan. This year the
stock has been holding its lows from March 2009, which could be
leading some chart watchers to believe that it is finding a bottom.
If the stock rebounds, the options sold short will expire worthless
and the trader will keep the credit received from
selling the puts
. (See our
More than 40,000 contracts traded in the name on Friday, about 23
times the average amount.
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