Options Trading News

Cabot Oil & Gas slipped yesterday and drew a large call trade that has ambiguous intentions.

COG ended down fractionally on the day at $42.11, but that belies the drop as it opened at $43.05 and traded as high as $43.49. The energy company has been unable to break and close above $44 except on Nov. 11, when it posted a 52-week closing high of $44.03. Shares tested support at $30 in early June.

More than 10,000 COG options traded yesterday, compared to a daily average of 2,200 in the last month. Fewer than 400 of those options were puts, and the big trade was an October call spread.

optionMONSTER's systems show that a trader bought 5,000 October 47 calls for the ask price of $0.90 against open interest of 369. At same time, he or she sold 5,000 October 44 calls for bid of $1.75 against open interest of 5,183.

This could be a credit spread, which would be looking for COG to remain below $44 through expiration. Alternatively, the trade could be rolling the position to a higher strike, selling the $44 calls and buying the $47 contracts. (See our Education section)