What's behind puts in C&J Energy
An interesting put trade tops the action in C&J Energy, a company that provides fracking and other oil and natural-gas services.
optionMONSTER tracking systems detected the sale of 3,000 March 20 puts for the bid price of $2.60 this morning. The previous open interest was only 15 contracts, so this is clearly a new position.
The trader is selling in-the-money puts in an effort to collect as much premium as possible and then buy the stock at a discount. If CJES is below $20 at that expiration in mid-March, the trader will purchase 300,000 shares on assignment, but the effective price would be $17.40 after the credit from the put sale is factored in. (See our Education section)
CJES is up 2.96 percent to $18.78 in midday trading, in the middle of its recent range. The stock hit a 52-week low of $16.66 two weeks ago, while $22 has been resistance for the last six weeks.
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