Options Trading News

December 7, 2012  Fri 3:47 AM CT

Anadarko Petroleum is at a potential resistance level, and one investor apparently thinks that it might head lower.

optionMONSTER's Depth Charge tracking program detected the purchase of almost 11,000 January 70 puts for $1.44 and the sale of an equal number of January 65 puts for $0.48. Volume exceeded the open interest at each strike, so this is a new put spread.

The trade cost $0.96 and will earn a maximum profit of 421 percent if the energy stock falls to $65 or lower on expiration. (See our Education section for more on the strategy, which is known as a vertical spread because it leverages a move between two price points.)

APC fell 0.52 percent to $74.35 yesterday and is up more than 10 percent since late October. The shares are now back to roughly the same level where they peaked in May and September, which could be leading some chart watchers to believe that they're now at risk of getting sold.

Total option volume was triple the daily average, according to the Depth Charge. Puts accounted for two-thirds of the total.
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I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

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