Credit: Shutterstock photoConsol Energy has been grinding higher, and the bulls are sticking with the name.
optionMONSTER's Heat Seeker monitoring program detected the purchase of 5,200 October 42 calls for $2.61. Equal-sized blocks were sold in the April 40 calls for $0.85 and the October 35 puts for $1.74. Volume was below open interest in the April contracts, so it appears than an existing long position was closed and rolled into a bullish strategy in October.
CNX rose 0.5 percent to $39.95 yesterday and is up 5 percent so far this year. While traditionally a coal miner, the company has kept its head above water by transitioning to natural-gas production. This year management plans to invest aggressively in the fast-growing Marcellus and Utica shale regions.
Yesterday's adjustment gives the investor an additional six months of upside exposure at an upfront cost of just $0.02. The position will now behave similarly to owning 520,000 shares, but only if they move. The new long calls will appreciate rapidly if CNX rises, but the trader will have to buy the stock at a loss if it drops. (See our Education section)
Total option volume was 12 times greater than average in the session, according to the Heat Seeker.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
