Options Trading News

January 14, 2013  Mon 2:45 AM CT

Shares of Alpha Natural Resources fell for four straight days last week, but heavy option volume in the coal producer was topped by put selling on Friday.

More than 37,400 ANR options changed hands the day, nearly double its daily average of 19,000. optionMONSTER systems show that 7,500 June 7 puts were sold at the bid price of $0.51 against open interest of fewer than 300 contracts, clearly a new position.

A minute later 135,000 ANR shares traded for $9.4944. It is possibly that the stock and options were tied together as a delta-neutral strategy, or the short puts could have been making a straightforward bet that ANR will remain above $7 through the June expiration. Either way, the trader isn't expecting a big drop in shares in the next five months. (See our Education section)

ANR finished the week at $9.55, down 2.25 percent on Friday after losing in the previous three sessions. The stock had reached an intraday high of $10.74 on Monday, more than double its 52-week low of $5.28 from early September.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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