Chesapeake Energy is near four-month highs, and one trader sees limited downside for the natural-gas company's stock.
CHK is up 0.7 percent at $19.20 this morning, near a $20 area that has been resistance going back to early April as it traded down from above $25. Shares hit a 52-week low of $13.32 in mid-May.
A trader bought 3,500 August 18 puts for the ask price of $0.07 against open interest of more than 36,000 while buying 3,500 September 19 puts for $1, according to optionMONSTER's systems. The volume in the latter strike was above open interest.
The trader is very likely rolling the short-put position from the expiring August contracts up to the September strike. The trader apparently believes that the stock will stay above the strike but is willing to buy shares if it does not. (See our Education section)
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