Put buying hits Canadian Natural
Traders are positioning for more potential downside in Canadian Natural Resources.
optionMONSTER's Depth Charge system identified heavy buying in the June 29 puts yesterday, with more than 6,900 trading for $0.36 to $0.56. This represents new positions, as volume was well above the strike's previous open interest of 1,405 contracts.
Long puts lock in the price where a stock can be sold no matter how far it might drop, gaining value in a selloff. The contracts can be purchased either as an outright bearish bet or a hedge on a long position . (See our Education section)
CNQ fell 2.32 percent to $29.50. The Calgary-based oil and natural-gas producer has lost more than 32 percent of its market value since last August. Shares tried to rebound in the second half of April but were unable to break through resistance around $34.
Total option volume in the name reached 9,800 yesterday, more than 11 times its daily average for the last month. Overall puts outnumbered calls by 15 to 1.
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