Denbury Resources is trying to bounce today, but one investor may be tired of holding the stock.
optionMONSTER's Depth Charge tracking program detected the purchase of 5,000 December 14 puts for an average premium of $0.17 and the sale of an equal number of December 16 calls for $0.30. The trade resulted in a credit of $0.13.
The investor has now locked in a maximum $16 selling price on the Texas-based oil driller. He or she will also receive a minimum $14 to the downside. The trader probably owns shares and is using the position as a hedge in a collar strategy. (See our Education Section.)
DNR is up 3.95 percent to $15.39 today but is down 13 percent since mid-September. Some traders may expect resistance around $16 because that level was support in early October and is the current location of the stock's 50-day moving average. That would explain why today's trader sold calls at that level.
Overall option volume in DNR is 9 times greater than average so far today.
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