Huge put buying takes aim at Matador
Heavy option volume is positioning for a possible drop in Matador Resources by the end of the year.
optionMONSTER's monitoring program shows that more than 52,000 December 17.50 puts were purchased for $0.45 to $0.80 yesterday. This is represents fresh buying, as open interest in the strike was only 723 contracts before the session began.
Long puts lock in the price where a stock can be sold, so they make money if shares decline. Investors use them to hedge long positions or to speculate on a drop. (See our Education section)
MTDR fell 3.08 percent to $23.59 yesterday but is up 19 percent in the last three months. The oil and natural-gas producer is expected to announce quarterly results after the close on Nov. 2.
Overall option volume was 365 times greater than average in the name yesterday. Puts outnumbered calls by a bearish 248-to-1 ratio.
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