Options Trading News

December 6, 2012  Thu 2:33 AM CT

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.
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