tradeMONSTER: Trade free for 90 days

Options Trading News

December 9, 2013  Mon 4:32 PM CT

NBL: SEE CHART GET CHAIN FIND STRATEGIES
Noble Energy has pulled back to support, and traders are drawing a line in the sand.

optionMONSTER's tracking systems detected the sale of 1,500 December 67.50 puts for $0.90 and the purchase of an equal number of December 65 puts for $0.30. Volume exceeded open interest at each strike, indicating that new positions were initiated.

Known as a put credit spread, the transaction resulted in a credit of $0.60, which the investor will keep if the Houston-based oil and gas stock closes at or above $67.50 on expiration at the end of next week. The trader faces a maximum loss of $1.90 at $65 or lower. (See our Education section)

NBL fell 1.31 percent to $68.59 yesterday and has been pulling back since it hit an all-time high of $78.01 six weeks ago. The stock is now back around the same $68 level where it hit resistance before breaking out in October, which could make some chart watchers expect support. Selling a put spread is a typical way to exploit such a pattern.

Total option volume was quadruple the daily average in the session.
Share this article with your friends


Related Stories

NBL

How traders are playing energy

November 25, 2014

Activity is mixed in the energy sector ahead of the OPEC meeting this week, and traders are using options to navigate the uncertain waters.

Invest Like a Monster - Las Vegas: March 13-14

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Archived Webinar

The Art of Trading: Forgiving the Spread

Education & Strategy

Know thy Greeks!

One of the most important roles played by the Option Pricing Model is the calculation of an important family of...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER