Options Guide

Options Traders Brace for Decline in NRG

Stock quotes in this article: NRG  

OptionMonster co-founder Pete Najarian provides options picks Monday, Wednesday and Friday in TheStreet.com's Deep in the Money Calls newsletter.

David Russell, reporter for OptionMonster.

Options traders are positioning for a pullback in NRG Energy(NRG Quote) as the utility stock struggles to break a technical resistance level on its chart.

Volume in the September 20 puts surged to 5,417 against open interest of 1,887 contracts, according to OptionMonster's monitoring systems. A handful of large purchases this morning for $2.15 accounted for all the activity.

NRG, which is up 3.6% to $21.40, and would have to decline at least 14% for these downside puts to generate a profit. The options action occurred at the same time volume spiked in the shares, which may reflect protective put buying. The trades also occurred after NRG was scheduled to have made a presentation at the Deutsche Bank Energy & Utilities conference.

NRG has been unable to break through the $21 trading support level in December and January. Some traders may now be considering that price as a near-term top for the shares.

Puts in NRG outnumbered calls by 4 to 1 today. Of the calls that did change hands, most of the large trades were sales, which suggests investors wrote the calls to lock in profits and guard against a decline in the shares.

  • Loading Comments...
  •  

SHARE:

  • email
  • print
  • comment
  • digg
  • delicious
  • linkedin

Recent Comments





Connect with TheStreet

Dow Jones S&P 500 NASDAQ 10-Year Note
10,464.40 1,110.63 2,176.05 32.79
Oil *
77.05
UP
30.69
UP
4.98
UP
6.87
DOWN
0.38
10 Yr
3.28%
SPDR Gold
116.62
+0.29%
+0.45%
+0.32%
-1.15%
Data delayed 20 minutes

Brokerage Partners

TheStreet Premium Services

All Services