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September 27, 2013  Fri 4:14 AM CT

SD: SEE CHART GET CHAIN FIND STRATEGIES
A gigantic put sale dominated yesterday's option volume in SandRidge Energy as shares traded to seven-month highs.
 
More than 119,000 options changed hands in the natural-gas and oil company, compared to a daily average of 9,584. Most of that was in a single print.

An enormous block of 91,643 March 6 puts was sold for $0.90, below the listed bid price at the time. The previous open interest had been just 1,338 contracts, so this is clearly a new position.

The put seller sees SD staying above $6 through expiration in mid-March 2014. The trader is looking to collect the $0.90 premium as opposed to making a directional bet on the stock, but he or she does face the possibility of having to buy 9,164,300 shares if SD falls. (See our Education section)

SD was up 2.74 percent to $5.99 yesterday, its highest close since February.
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