Learn the trade here. Make it on tradeMONSTER

Options Trading News

January 22, 2013  Tue 3:09 AM CT

XCO: SEE CHART GET CHAIN FIND STRATEGIES
Exco Resources has been range-bound for more than a year, and some traders apparently believe that the stock will stay above its long-term support level.

optionMONSTER's tracking systems show that 2,700 June 6 puts were sold for an average price of $0.44 on Friday. The volume was well above the strike's open interest of 1,926 contracts at the beginning of the session, indicating that this is new positioning.

XCO rose 2.24 percent on Friday to end the week at $6.84. Shares of the oil and natural-gas company, which operates in the U.S. shale space, has spent the last year trading between $6 and $9. It had peaked above $40 before the stock market crashed in 2008 and was trading above $20 in June 2011 before beginning a steady decline.

The put sellers are looking for XCO to close above that $6 support level at expiration in mid-June. If the stock is below this strike price, the traders will face the obligation to buy the shares. (See our Education section)

The trades pushed total option volume in XCO to 5,625 contracts, quadruple its daily average in the last month. The company is scheduled to report earnings results on Feb. 20 after the close.
Share this article with your friends


TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Free Webinars

Swing Trading w/ Jon Najarian and Ron Ianieri

Education & Strategy

Make your rules, and stick by them!

New traders often act on the recommendations of others or on gut feel. But that is a quick way to...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER