Oil stocks are popping today, but one investor remains cautious on the sector.
optionMONSTER's Depth Charge tracking system detected the purchase of 10,235 February 47 puts on the SPDR S&P Oil & Gas Exploration & Production exchange-traded fund for $2.32. An equal number of January 48 calls puts were sold at the same time for $1.50, but volume was below open interest in that strike.
The activity suggests that the investor had previously owned the January contracts and closed them to roll their position forward by one month. He or she probably owns the fund or some of its constituents and using the puts as a hedge . (See our Education section)
The XOP is up 4.55 percent to $50.82 in midday trading. The fund's biggest holdings include Approach Resources, Clayton Williams Energy, and Continental Resources.
Overall option volume is almost twice the average amount so far today, with puts outnumbering calls by 8 to 1, according to the Depth Charge.
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