OptionsHouse

Options Trading News

November 1, 2013  Fri 3:16 AM CT

SU: SEE CHART GET CHAIN FIND STRATEGIES
Suncor Energy climbed on a strong earnings report yesterday, but big investors got cold feet late in the session.

optionMONSTER's Depth Charge tracking system detected the purchase of about 21,000 November 36 puts for $0.36 in volume well above the strike's previous open interest of just 1,890 contracts. Almost all the trades hit 40 minutes before the closing bell.

Puts lock in the price where the Canadian oil stock can be sold, so they move inversely to the shares. Investors use them to speculate on a drop or to hedge against a selloff without having to unwind a large position. (See our Education section)

SU closed 0.5 percent higher at $36.36 yesterday and at one point was up more than 2 percent. Profit totaled C$0.95 a share, better than the C$0.87 expected by analysts. Production also rose 11 percent, though guidance was trimmed.

The stock has spent more than a month pushing against the $36.85 level where it peaked early last year, which could leave some chart watchers afraid that it's at resistance and will drop.

Overall option volume was 14 times greater than average in the session, according to the Depth Charge. Puts accounted for a bearish 85 percent of the total.
Share this article with your friends


Related Stories

SU

Suncor puts follow bearish momentum

January 21, 2016

Traders are positioning for more downside potential in the Canadian oil-stands developer, which is already down 30 percent in the last three months.

OptionsHouse

Premium Services

Upcoming Webinar:

Using Options For Income

http://bit.ly/1nY1OKA

Jon Najarian and Adam Mesh of Options Wealth Machine discuss a detailed strategy utilizing credit spreads to generate income, and how any level of trader can use this simple trading technique.

Education & Strategy

Sweet Spot Exceptions

As discussed last week, when using the Stock Replacement Strategy to replace a stock position to trade direction, we want to use an option that has very similar characteristics to the stock. We talked about using the deep in-the-money, 80 to 85 delta option that is similar in the Greeks and has relatively little extrinsic value which tends to work against us in stock directional trading.

View more education articles »