Put seller sees floor under Halcon
Mike Yamamoto | firstname.lastname@example.org
optionMONSTER's tracking systems detected the purchase of 3,000 October 4 puts for $0.25 at the same second yesterday. This is clearly a new position, as the volume was nearly 7 times higher than the strike's open interest of only 445 contracts before the trade appeared.
The put seller is looking for HK to stay above the $4 strike price through expiration in mid-October. If it falls below that level, the trader will be on the hook to buy shares at an effective price of $3.75 when the $0.25 credit from the put sale is subtracted.
HK closed fractionally higher yesterday at $5.41 after dipping to $5.27 in midday trading, just a penny above its 52-week low of $5.26 reached on Nov. 12. The oil and gas company had climbed above $8 in mid-April but then sold off sharply and has been been trending lower ever since. Shares are down more than 50 percent since trading at 52-week highs above $11 in June 2012.
Total option volume in the name surpassed 10,000 contracts yesterday, quadruple its daily average for the last month.