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