Options Trading News

December 28, 2012  Fri 4:14 AM CT

Ultra Petroleum has been falling since early November, and one trader is looking to ride the stock lower.

optionMONSTER's Depth charge tracking program detected the purchase of about 1,900 January 18 puts for $0.65. A similar number of January 19 puts were sold at the same time for $1.15, but the volume was below open interest at that strike.

The activity suggests that the trader came into the session owning the higher-strike contracts. He or she then closed that position and rolled to the 18s, receiving a credit of $0.50 in the process. The trader also stands to keep money if the Houston-based energy company continues to decline. (See our Education section)

UPL fell 1.29 percent to $18.40 yesterday and has lost 20 percent of its value in the last two months. The shares are now back around the same level where they bounced in the spring, which could be leading some chart watchers to expect a major collapse if the stock breaks below it.

Total option volume was triple the daily average in the session, according to the Depth Charge. Puts accounted for about 70 percent of the total.
Share this article with your friends


Premium Services

Education & Strategy

The art of trading

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.

View more education articles »