OptionsHouse

Options Trading News

December 6, 2012  Thu 2:33 AM CT

CPN: SEE CHART GET CHAIN FIND STRATEGIES
Shares of Calpine have been range-bound for most of the year, and one trader sees no reason for that to change in the next three months.

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.
Share this article with your friends


Related Stories

CPN

Short-term trades bet on pop in Calpine

May 7, 2016

The utility company reported mixed quarterly results on April 29 and is down 5 percent in the last three months, but traders are looking for a rally.

OptionsHouse

Premium Services

Education & Strategy

Timing the Trade

Both break outs and a break downs need to have a couple things happen before it is considered a confirmed break out or break down by technical definition!  The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

View more education articles »