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Options Trading News

January 3, 2013  Thu 2:14 AM CT

CPNO: SEE CHART GET CHAIN FIND STRATEGIES
A large trader is betting on a floor beneath shares of Copano Energy as stock breaks above some key levels.

optionMONSTER's tracking systems detected the sale of 4,694 May 29 puts in a single print for $0.90. Open interest in the strike was just 6 contracts at the beginning of the day, so this is clearly a new position in the natural-gas services company.

CPNO gained 2.75 percent to $32.50 yesterday, breaking out of its recent range after rising above its 100-day moving average on Monday. The stock had been trading around $36 in early May but plunged to about $25 by mid-month after badly missing earnings forecasts. Shares rebounded back to the $34 level but then settled back into a channel mostly between $29 and $32.

The put seller is looking for CPNO to close above the $29 strike price by expiration in mid-May. If the stock is below that level, the trader will be on the hook to buy shares at an effective price of $28.10 when the $0.90 credit from the put sale is included. (See our Education section)

Yesterday's put trading pushed total option volume in the name past 7,400 contracts, compared with a daily average of just 106 in the last month.
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