Trader bets on cap to upside in Cabot

By
A A A

Cabot Oil & Gas has been trapped at resistance for almost a month, and one investor apparently thinks that it not see further gains.

optionMONSTER's tracking systems detected the sale of almost 3,200 September 40 calls against open interest of just 15 contracts. Most of them priced for $3 to $3.05.

The trader is now obligated to sell shares in the shale-energy company if they close at or above $40 on expiration, but including the credit earned their exit price would be about $43. He or she probably owns stock and is using the strategy to reduce risk. (See our Education section's discussion of covered calls .)

COG rallied from about $31 to $40 during June but has been moving sideways since then. Yesterday's call selling reflects a belief that the stock will stay in that range in the next two months. The shares closed yesterday down 1.35 percent to $39.50.

Overall option volume was 4 times greater than average in the session.



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: COG

optionMONSTER

optionMONSTER

More from optionMONSTER:

Related Videos

Living the Life of Pie
Living the Life of Pie              

Stocks

Referenced

50%

Most Active by Volume

76,804,975
  • $63.93 ▲ 0.85%
56,138,918
  • $3.35 ▼ 0.45%
52,878,077
  • $15.69 ▲ 5.66%
50,540,730
  • $64.97 ▲ 3.52%
45,147,565
  • $15.60 ▲ 0.13%
38,745,424
  • $32.89 ▼ 0.72%
37,512,306
  • $26.32 ▼ 0.19%
35,614,433
  • $95.39 ▲ 0.04%
As of 7/9/2014, 04:08 PM