Market News

October 13, 2016  Thu 5:47 AM CT

Patterson-UTI Energy has rallied hard in recent weeks, but one trader is preparing for a possible pullback.

optionMONSTER's tracking program detected the purchase of 2,500 November 20 puts in one print for $0.29 yesterday. Volume was more than 5 times the open interest in the strike, showing that this is a new position.

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)

PTEN fell 0.49 percent to $24.21 yesterday but is up 27 percent in the last month. The energy-drilling contractor is scheduled to release quarterly results in pre-market hours on Oct. 27.

Overall option volume was 5 times greater than average in the name yesterday. Puts outnumbered calls by a bearish 7-to-1 ratio.

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