Bears back for more in Kinder Morgan

optionMONSTER

Kinder Morgan is seeing bearish option activity for the second time in three days.

More than 8,300 April 35 puts have traded in a strong buying pattern today, led by prints of 5,000 that went for $0.27 and 2,600 for $0.25, according to optionMONSTER's Depth Charge system. The volume was nearly double the strike's open interest of 4,299 contracts before the session began, indicating that this is new activity.

These puts weren't tied to any stock activity identified by our systems today, though they could have been purchased as a protective hedge on a long position established earlier. If traded in isolation, however, these options could be making a bearish bet that KMI will fall back below the $35 strike price to levels last seen at the end of December. (See our Education section)

The action follows a purchase of 4,000 puts at the same strike on Wednesday. All of these options expire on April 19, just two days after the company is scheduled to announce first-quarter results.

KMI is down fractionally at $37.23 in midday trading but continuing to hold support at its 50-day moving average for more than a week. Shares of the energy-pipeline company gapped higher at the beginning of the year but have been range-bound between $36 and $38 since then.

Today's put buying has driven total option volume in the name to 9,641 contracts so far today, already 5 times its full-session average of 1,991 in the last month. Only 125 calls have changed hands, a reflection of the session's bearish bias.


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