Show of support in Clean Energy Fuels-11/10/2009

Clean Energy Fuels reported earnings after the bell yesterday, and at least one investor sold puts before the news.

optionMONSTER's tracking system detected the sale of 3,000 December 12.50 puts for $0.85 against open interest of 901 contracts. The trade will earn a profit as long as the natural-gas infrastructure stock closes above $11.65 by expiration.

CLNE rose 3.3 percent to $12.84 in normal trading. It was quoted at $12.32 after hours, when its third-quarter earnings release was issued. Non-GAAP earnings were $0.01 and the net loss was $0.31. It's not clear which number should be compared with analysts' forecasts of a $0.30 loss, though revenue missed consensus by about 11 percent.

By selling the puts, the trader agreed to purchase the shares at the strike in return for accepting the premium. The strategy also took advantage of CLNE's 64 percent implied volatility reading, up from 57 percent in late October. If volatility reverses lower for the stock, it will reduce the value of the puts sold short.

Volatility usually declines after earnings are announced.

Other investors also sold the November 12.50 puts for $0.55. Volume totaled 1,165 contracts compared with open interest of 974.

Overall options volume in the name was six times greater than average. Put selling accounted for at least 69 percent of the activity, according to optionMONSTER data.

(Chart courtesy of tradeMONSTER)

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