| Apache gets a vote of confidence | |
| | |
|
The energy sector has come back to life, and traders are betting that downside potential will be limited for Apache in the next month.
optionMONSTER's tracking systems detected the purchase of 50,800 October 40 puts bought for $1.13 and the sale of 50,800 October 42.50 puts for $2.01. Volume was below open interest in the lower strike, indicating that a short-put position was rolled higher.
The trader had likely sold the October 40 puts earlier and is now buying them back to close that position. The new short puts are looking for APA to stay above $42 through expiration in mid-October, while the trader collects the higher option premium. If the stock falls below that strike price, the put sellers will be on the hook to buy shares at that level. (See our Education section)
APA is up 6.11 percent to $42.90 in afternoon trading. The natural-gas and oil producer has held support around $39 in recent weeks, its lowest level since early 2004.
Today's short-put roll has pushed total APA option volume above to 108,400, more than 15 times its daily average for the last month.
More From optionMONSTER
|
|