Bear drills into McMoRan Exploration

optionMONSTER

McMoRan Exploration is down today even as the broader market rallies, and one trader is looking for shares to fall further.

The oil and natural-gas company is down 4.28 percent to trade at $12.80. MMR has fallen from above $16 at the beginning of December but is well above the 52-week low of $8.25 set in early October.

Today's option volume tops 28,000 contracts, compared to a daily average of 5,000. optionMONSTER's systems show that most of the activity is in one put spread.

A trader sold 10,000 February 12 puts for $0.70 against open interest of 20,509. Seconds later he or she bought 10,000 March 12 puts for $1.34 with no previous open interest at that strike.

This could be a calendar spread designed to profit if shares are around $12 at expiration. It is also possible that the trader is rolling a put position out to March as the February expiration cycle enters the last four weeks, with time decay increasing exponentially. (See our Education section)

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