Traders Load Up on Puts in Microsoft, J.C. Penney Page 2
Afternoon trading also brought unusual volume to SandRidge Energy (SD - commentary - Cramer's Take), the Oklahoma-based independent oil and natural gas producer that reported a doubling of third-quarter revenues last week. Shares bounced 5.2% higher to $10.83 heading into the close, as a near ninefold increase in options trading volume showed bullish call spread activity trading on very large volume in the January contract. We wonder if the activity here may have been of a feather with last week's volume in Chesapeake Energy (CHK - commentary - Cramer's Take), the onshore oil driller that surged on speculation that an Obama presidency would warm to producers of compressed natural gas.
In any event, today's market action showed traders positioning long of the January 15/17.50 call spread, a position that would carry with it a debit of 49 cents -- a cost that might have been further defrayed today via the sale of January 7.50 puts.
P.S. Will you be there when Cramer makes his next move?
Strong brands and companies with vast market exposure can help bolster your portfolio. Jim was able to lock in a 64% gain by buying Ingersoll-Rand at $13 and selling at $22.50. Action Alerts PLUS members were the first to see these moves. Were you among them? Get Free Access Today!
At the time of publication, Darst had no positions in the stocks mentioned.
Rebecca Engmann Darst is the Portfolio Manager for TheStreet.com?s Options Alerts Portfolio newsletter and an equity options analyst for RealMoney Each Thursday at 6:30 a.m. EST, she delivers the early-morning lowdown on option volume and sector trends on CNBC's "Squawk Box."
Prior to her work in the equity options market, she spent seven years in Scandinavia as a Copenhagen-based chief reporter for a European Commission news service, correspondent for Spanish daily El Mundo and Radio Netherlands, followed by stints at Nordea Bank and Saxo Bank.
RSS FEEDS
PODCASTS
