Trader sees Calpine holding up in winter
Mike Yamamoto | email@example.com
optionMONSTER's tracking systems detected the sale of 2,140 March 16 puts in a single print for $0.35 yesterday. Open interest in the strike was just 46 contracts at the start of the session, so this is clearly a new position.
CPN rose 0.58 percent yesterday to close at $17.44, right at its 100-day moving average and pennies below the 50-day line. The power-generation company, which operates natural-gas plants, has been trapped between $16 and $19 since early March.
Yesterday's put sale is looking for CPN to close above the $16 strike price at expiration in mid-March. If the stock is below that level at that time, the trader faces the obligation to buy the shares at an effective price of $15.65 once the credit from the put sale is subtracted. (See our Education section)
The trade made up almost all of yesterday's option volume in Calpine, which was nearly 9 times higher than its daily average.