Penn Virginia draws covered call

Chris McKhann (
June 9, 2014

A large covered-call trade is looking for a limited range in Penn Virginia.

A block of 2,425 December 15 calls was sold for the bid price of $1.85 today, according to optionMONSTER systems. The previous open interest was just 5 contracts, so this is clearly a new position.

Just 30 seconds later, a print of 242,500 shares of PVA traded for $14.39. So this is a covered call , with the trading betting that the stock will hold between $13.15 and $16.85 through the end of the year. (See our Education section and my recent column on this strategy in our Advantage Point newsletter.)

PVA is up 0.91 percent to $14.39 in midday trading. The oil and gas company was below $5 in mid-September but at a new high just above $18 a month ago.

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