Investor looks to power up with Duke

optionMONSTER

One investor is positioning for Duke Energy to bounce.

optionMONSTER's Heat Seeker monitoring program this morning detected the purchase of 2,500 December 62.50 calls for $0.55 and the sale of an equal number of December 60 puts for $0.75. Volume was more than twice open interest at each strike, indicating that new positions were initiated.

The investor collected a credit of $0.20 and now stands to earn infinite profits if the utility stock closes at or above $62.50 on expiration. The trader will also be forced to buy shares for $60 if they go below that level, but he or she may be willing to take that risk if they like the company.

DUK fell 0.63 percent to $61.57 in morning trading. The energy company's stock has been falling since the summer and is now trying to hold support above the $60 level where it bounced in April. Some chart watchers may expect support around the current area, which would explain today's bullish options action.

More than 5,100 contracts have traded so far today, almost 5 times average amounts.

More From optionMONSTER

View Comments (0)