Options Trading News

May 9, 2013  Thu 10:49 AM CT

Oil States International hit an all-time high today, and one trader is betting that the energy-services company will hold its gains in the near term.

OIS is up 3.65 percent to $98.95 in midday trading, not far off the intraday high of $99.50 set this morning. The stock has run up from around $75 at the start of last week, fueled by news that activist hedge fund Jana Partners has a 9.2 percent stake in the company.

optionMONSTER systems show a trader sold 3,000 May 95 puts for the bid price of $0.85 on a wide bid/ask spread. This is clearly a new position, as the strike's open interest was just 4 contracts before the trade appeared.

The put selling is a bet that OIS will hold the recent gains through expiration a week from tomorrow. If the stock falls below the $95 strike price--where it was only yesterday--the trader would face the obligation to buy shares at that level. (See our Education section)
Share this article with your friends


Premium Services

Education & Strategy

The art of trading

As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

View more education articles »