Market News

November 28, 2016  Mon 5:16 AM CT

Traders apparently believe that a drop may be coming in Encana.

OptionMonster's market scanner shows that 6,000 December 10 puts were purchased for $0.10 to $0.15 on Friday. Volume was more than 5 times the open interest in the strike, indicating that new positions were established.

Long puts lock in the price where a stock can be sold, so they make money if shares decline. Investors use them to hedge long positions or to speculate on a drop. (See our Education section)

ECA fell 1.78 percent to $12.16 on Friday but is up 25 percent in the last three months. The oil and natural-gas producer released bullish quarterly numbers on Nov. 3.

Overall option volume was about average in ECA on Friday, but puts outnumbered calls by a bearish 14-to-1 ratio.

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