OptionsHouse

Options Trading News

June 13, 2013  Thu 10:52 AM CT

NRG: SEE CHART GET CHAIN FIND STRATEGIES
One trader apparently believes that NRG Energy will hold current levels.

optionMONSTER systems show that a block of 2,650 January 26 puts was sold for the bid price of $2.35 today. This is a new position, as there was no open interest in the strike before the trade appeared.

NRG is down 1.32 percent to $26.09 in midday trading. The wholesale power producer came into the week  above $27 after bouncing off support at $25.

Put selling that is this close to the money is a neutral strategy, betting that NRG will be above $26 but will not run too high through expiration in mid-January. The trader could also be using this strategy with the intention of getting assigned and required to buy the shares, at an effective purchase price of $23.65 when the $2.35 credit from the put sale is included. (See our Education section)

Total option volume in the name already tops 6,100 contracts, more than double its full-session average for the last month.
Share this article with your friends


Related Stories

NRG

Upside trade extended in NRG Energy

May 19, 2016

The power company is up 55 percent in the last three months, and a large investor is rolling calls to position for even more gains.

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 »