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September 26, 2012  Wed 12:15 PM CT

CXO: SEE CHART GET CHAIN FIND STRATEGIES
Sentiment has been worsening in the energy space after a big run, and now the bears are hitting Concho Resources.

optionMONSTER's Depth Charge monitoring program detected the purchase of more than 1,000 December 95 puts for $7.10. Volume was more than 7 times previous open interest at the strike.

Owning those puts ensures the investor a minimum exit price of $95 for the independent oil-and-gas company. These options are in the money and will therefore provide significant leverage to a decline in the share price. Such contracts are usually used by investors as a speculative short rather than as a hedging strategy because of their high cost. (See our Education section)

CXO is down 2.66 percent to $93.48 this afternoon. The stock has been climbing since the summer along with most other energy companies, but performance and sentiment have worsened in the last two weeks amid increased worries about the global economy and Europe's debt crisis.

Oil service provide Superior Energy also saw downside trades earlier today. (See related story)

Overall option volume is about triple the average amount in CXO so far today. Puts account for almost two-thirds of the total, according to the Depth Charge.
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