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May 9, 2013  Thu 12:15 PM CT

CIE: SEE CHART GET CHAIN FIND STRATEGIES
Cobalt International Energy fell sharply yesterday, but the bulls weren't deterred.

optionMONSTER's Heat Seeker monitoring system detected the purchase of 10,000 October 30 calls for $2. An equal number of July 30 calls was sold at the same time for $0.60, but volume was below open interest in those.

It appears that an existing long position was closed in the July contracts and rolled forward in time. Making the adjustment cost $1.40 and provides the investor with an additional three months of long exposure to the global energy company.

CIE is down 0.22 percent to $26.64 in afternoon trading but had been working its way higher since bottoming at $20 in November. It gapped lower yesterday after announcing that big institutional investors would sell as many as 57.5 million shares.

The stock has been trying to holding its ground since the offering priced. Some traders may think that it needs time to recover following that drop, which could explain why the long position was extended today. (See our Education section for more on how options can be used to manage trades.)

More than 24,000 contracts have changed hands in the name so far today, about 8 times its average amount. Calls outnumber puts by a bullish 191-to-1 ratio.
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