NiSource got hammered along with the rest of the market yesterday, and some traders bought the pullback.
optionMONSTER's Heat Seeker monitoring program detected the purchase of about 6,500 September 20 calls against open interest of just 140 contracts. Given that NI was above the strike price for most of the session, these calls were in the money and thus closely tracked the share price.
That caused premiums to decline from as high as $1.15 in the morning to just $0.75 near the close. (See our Education section)
NI fell 4.46 percent to $19.69, and has mostly been trending higher along with many other names in the natural-gas sector. The company mostly distributes energy and operates pipelines.
Yesterday's call buying occurred mostly early in the session as the stock was attempting to hold support at its 50-day moving average. But it continued lower as the negativity spread and ended all the way down at the 100-day moving average.
Overall option volume in the name was 32 times greater than average yesterday, with calls outnumbering puts by 68 to 1.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.