One trader thinks the Superior Energy is going nowhere in a hurry.
optionMONSTER's trade scanners detected the sale of 3,000 December 20 calls for $1.30 and 3,000 December 20 puts for $1.05. That totals a credit of $2.35.
If SPN closes at $30 on expiration, the trader will keep the credit as profit. Gains erode on either side of that level, turning to losses below $27.65 and above $32.35. (See our Education section for more on the position, known as a short straddle .)
SPN fell 2.6 percent to $20.24 yesterday and has lost more than one-quarter of its value this year. The oilfield-servicing stock is now back around the same levels were it found support in early 2010, which could make some chart watchers think that further downside is limited.
Given nervousness about the broader economy, they could also expect upside will be limited in the near term. If SPN does move sideways, the calls and puts will both lose value to the normal process of time decay as expiration draws near.
Total option volume was 11 times greater than average in the session.
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