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Bearish play in Chesapeake Energy

Chris McKhann (chris.mckhann@optionmonster.com)

Chesapeake Energy has been on a roller-coaster ride this year, and one trader is positioning for another dip.

optionMONSTER systems show that a trader bought 5,000 January 16 puts for the ask price of $1.35. This is a new position, as there was no open interest at that strike.

This put buying was not tied to any stock activity identified by our systems yesterday but could be hedging against an existing long position . It could also be an outright bearish play, looking for CHK to decline by the end of the year year. (See our Education section)

CHK was up a penny yesterday at $18.60. The natural-gas and oil company was at a high just shy of $23 a month ago but are back down to the mid-January levels. Shares haven't traded below $16 since last June.

More than 40,000 CHK options traded overall yesterday, 2.5 times higher than its daily average for the last month.

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