Market News

January 5, 2017  Thu 6:37 AM CT

Traders are buying puts in Rice Energy for the second time in as many weeks.

Our monitoring systems detected the sale of 5,000 January 19 puts for $0.25 at the same second yesterday. This is clearly a new position, as open interest in the strike was a mere 29 contracts before the trade occurred, and follows selling in the July 24 puts two weeks ago.

Short puts lock in a price where investors must buy a stock, while letting them collect premium. Traders use the technique when they like a stock and think that the risk of a big drop is limited. (See our Education section)

RICE rose 2.16 percent to $20.85 yesterday but is down 23 percent in the last three months. The next quarterly report is estimated for after the close on Feb. 23.

Overall option volume was 3 times greater than average.
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