Teekay LNG Partners pulled back to key support yesterday, and
one bull is jumping on board.
optionMONSTER's Heat Seeker tracking system detected the purchase
of about 2,500 May 40 calls on the natural-gas transport stock for
$0.62. An equal number of May 35 puts was sold at the same time for
$0.42. Volume was more than double open interest in both strikes.
The position cost about $0.20 to open and will simulate a long
position in the company, which operates a fleet of tankers that
ship liquefied natural gas. It will profit if TGP pushes toward or
above $40 and lose money below $35. If it's between those two
levels on expiration, both options will expire worthless.
The stock made an all-time high of $41.50 in mid-March and then
drifted sideways. It fell 5.41 percent to $38.31 yesterday after
announcing it would raise capital.
The drop brought TGP back to roughly the same level that offered
resistance in previous months and to its 50-day moving average
(black line on chart at right). Some chart watchers may consider
that an attractive entry point and want to get long around this
The bullish trade pushed total option volume in the name to 85
times its daily average.
One word of caution: TGP is organized as a limited partnership
(LP), which can have unusual tax consequences. Investors may want
to understand them before owning the units.
(Chart courtesy of tradeMONSTER)
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