Credit: Shutterstock photoNRG Energy has potential resistance at $23, and one investor is targeting that level.
optionMONSTER's monitoring programs detected the sale of about 4,700 September 23 calls for $0.50 against open interest of just 875 contracts. The trade was probably the work of a shareholder in the power-generation company who's looking to generate income by using a covered call strategy.
NRG is down 2.38 percent to $21.73 this afternoon. While it's gotten hammered along with the rest of the market in the last month, it's still up more than 10 percent so far in 2011, while the S&P 500 is down about 9 percent.
The shares started coming back to life in the first four months of the year after a long period of weakness. It found support around $23 in June, which could make some investors think that will now prove resistance.
Writing calls at that level will compel them to sell shares if NRG goes back to $23. But including the credit earned, their exit price will be $23.50. (See our Education section)
Overall option volume in NRG is 5 times greater than average so far today.
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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.
