Options Trading News

October 21, 2011  Fri 11:31 AM CT

Cloud Peak Energy is back to a resistance, and the bears are stepping in.

optionMONSTER's Depth Charge monitoring program detected the purchase of about 2,900 November 20 puts for $0.65 to $0.75. Roughly the same number of November 20 calls were sold at the same time for $1.55 to $1.70. Volume was more than 5 times open interest in both strikes.

The trade netted a credit of about $0.95 and was probably the work of an investor who owns shares in the producer of low-sulfur coal. They have essentially locked in a maximum exit price of $20.95 and will make money to the downside.

CLD is off 0.38 percent to $20.83 in afternoon trading. It's up more than 20 percent so far this month and has returned to about the same level where it hit resistance immediately after the market crashed in early August. That could be leading some chart watchers to anticipate resistance overhead.

The next big event that could move the shares is the release of third-quarter earnings after the bell on Oct. 27.

Overall option volume is 20 times greater than average so far today.
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