OptionsHouse

Options Trading News

June 27, 2012  Wed 9:21 AM CT

LNG: SEE CHART GET CHAIN FIND STRATEGIES
Cheniere Energy is holding support, but one trader sees little upside.

LNG is up fractionally this morning, trading at $12.42. Shares of the liquefied natural-gas company are down from a 52-week high of $18.92 in late April but have largely held the $12 level for the last month.

optionMONSTER's systems show that a trader sold 3,000 December 15 calls for the ask price of $1.45. This outpaced the open interest, so it is a new position.

If the calls were sold naked, it would have an initial bearish bias. That position would have significant risk if LNG runs higher through the end of the year. The options could also have been traded against long shares as a covered call, which would be bullish up to the strike price but give up any gains above that level. (See our Education section)
Share this article with your friends


Invest Like a Monster - San Antonio: October 9-10

Premium Services

Archived Webinar

Education & Strategy

Real vs. Synthetic

We now know that there are two ways of creating a call position, a put position, and a stock position. We can simply use the actual real security or we can recreate it synthetically. We can create these positions in both long and short forms and this ability sets up an interesting scenario--an arbitrage!

View more education articles »