Suncor Energy climbed on a strong earnings report yesterday, but big investors got cold feet late in the session.
optionMONSTER's Depth Charge tracking system detected the purchase of about 21,000 November 36 puts for $0.36 in volume well above the strike's previous open interest of just 1,890 contracts. Almost all the trades hit 40 minutes before the closing bell.
Puts lock in the price where the Canadian oil stock can be sold, so they move inversely to the shares. Investors use them to speculate on a drop or to hedge against a selloff without having to unwind a large position. (See our Education section)
SU closed 0.5 percent higher at $36.36 yesterday and at one point was up more than 2 percent. Profit totaled C$0.95 a share, better than the C$0.87 expected by analysts. Production also rose 11 percent, though guidance was trimmed.
The stock has spent more than a month pushing against the $36.85 level where it peaked early last year, which could leave some chart watchers afraid that it's at resistance and will drop.
Overall option volume was 14 times greater than average in the session, according to the Depth Charge. Puts accounted for a bearish 85 percent of the total.
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