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


OptionsHouse

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Education & Strategy

Using spreads to minimize risk

Last week we discussed the risk vs reward profile of a debit call spread in Wells Fargo (WFC). This week we will run thru the risk vs reward of selling a credit put spread to achieve the same exposure of that debit call spread.

View more education articles »