Range Resources is trying to base out after a late-June selloff, and at least one investor thinks it will hold.
optionMONSTER's tracking systems detected heavy put selling in the August 39 puts, which traded more than 5,900 times, mostly for $1.65 to $1.84, against open interest of just 122 contracts. The August 37.50 puts also saw volume of 2,254, with transactions pricing for $1.10 to $1.30.
RRC fell 1.56 percent to $39.75 in late morning trading. The natural-gas producer lost about one-fifth of its value in the second half of last month but in July has been attempting to bounce at about $39. That's about the same level that served as the top of its trading range after the 2008 market crash and provided support the next April.
Today's put sellers are wagering that RRC will hold this price range. If it closes above the strike prices of the options, they'll get to keep the premiums. (See our Education section)
The traders may expect implied volatility to fall after the company issues results on Monday afternoon, which would reduce the value of the puts sold short. Such transactions are common before earnings reports.
Overall options volume in the name is about five times greater than average so far today, with calls accounting for 81 percent of the activity.
(Chart courtesy of tradeMONSTER)
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