OptionsHouse

Options Trading News

May 2, 2013  Thu 10:34 AM CT

ANR: SEE CHART GET CHAIN FIND STRATEGIES
As shares of Alpha Natural Resources tumble today, one trader is positioning for a big move higher or lower in the next two weeks.

More than 5,000 May 6 puts were purchased this morning, led by a print of 3,132 that went for $0.11, according to optionMONSTER systems. The volume was more than double the strike's open interest of 2,177 contracts before the session began, clearly showing that this is fresh buying.

Shortly after those puts traded, a block of 50,000 ANR shares was bought for $6.92. The combination of stock and options creates an overall long-volatility position that could profit if shares move sharply in either direction. (See our Education section)

ANR is down 7.1 percent to $6.94, back near long-term support that has been in place since October. This trader apparently believes that the coal-mining company will either bounce sharply, possibly back to the $10 level last seen in January, or a break lower by expiration a week from tomorrow.

Total option volume in the name is more than 25,000 so far today, triple its daily average in the last month.
Share this article with your friends


Invest Like a Monster - San Diego: June 26-27

Premium Services

Education & Strategy

Introduction to Synthetics

"Synthetics" is the name given to the relationship of two separate positions, constructed differently, that have the same exact risk and reward at each and every price level. They say that there is more than one way to skin a cat...well, there is always more than one way to create an option position...

View more education articles »