Options Trading News

January 24, 2014  Fri 11:07 AM CT

Endeavour has been running recently, and traders apparently think that a bottom is in.

optionMONSTER's tracking systems detected the sale of 3,743 January 2015 5 puts for $0.95 in less than 30 seconds today. Volume surpassed open interest of 3,312 contracts, indicating that new positions were initiated.

The put seller would keep that $0.95 credit as profit if END remains above $5 for the next year, but below that level the trader would face the obligation to buy shares. Given the premium received today, the effective entry price would be $4.05. (See our Education section)

END is down 2.76 percent to $6.70 in midday trading but is up 30 percent in the last month. The energy company, which operates in the United States and United Kingdom, has been climbing from long-term lows in March 2013. Short interest still accounts for 28 percent of the float.

It also consolidated around $5 in November and December, so today's put seller may be targeting that area as long-term support.

Total option volume is 12 times greater than average so in the session.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. 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.

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