Lower volatility seen in Kinder Morgan
Chris McKhann | [email protected]
optionMONSTER systems show that almost 11,000 KMI options have already traded, compared to a daily average of 3,400. A single print of 10,000 March 37.50 calls was sold for the bid price of $0.63 in volume that was more than twice the open interest, clearly indicating that this is a new position.
A few minutes after the calls were sold, the largest block of KMI stock traded as 372,911 shares were bought for $36.74. The stock and options are likely tied together as a delta-neutral strategy that can profit if the actual volatility of the stock is less than that implied by the options. (See our Education section)
KMI is up 0.44 percent to $36.87 this morning. The energy-pipeline company is just below Thursday's close, which was the highest since shares came off their 52-week high above $40 back in April.