Big Trader Bets on Plains Exploration Drop

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.

Plains Exploration & Production(PXP Quote) is down 17% in the last month, and at least one large trader is betting on further downside for the oil and gas company.

Volume in the August 22.50 puts rose to 7,209 against open interest of 2,342 contracts, according to OptionMonster's tracking systems. Purchases for $1.10 to $1.20 accounted for more than half the activity.

Plains Exploration would have to fall another 15% by expiration for the options bought today to turn a profit. The stock is down 6.8% to $25.21 in afternoon trading today.

The energy company doesn't have any events on its calendar that could serve as a catalyst for the shares. The stock tends to follow the price of oil, which has been falling on concern about the strength of the global economy.

Options volume in Plains Exploration was twice average, with puts outnumbering calls by almost 3 to 1.