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Bearish play in Patterson-UTI Energy

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Patterson-UTI Energy is drawing bearish option activity ahead of its earnings report this week.

optionMONSTER's Depth Charge system shows that a trader bought 2,500 May 21 puts for $0.55 at the same second on Friday. This is clearly a new position, as open interest in the strike was a mere 10 contracts before the session began.

These puts, which lock in the price where traders can sell the stock no matter how far it might fall, were not tied to any stock activity identified by our systems on Friday. They could be hedging a long position established earlier or making a straight bet that MGM will drop in the next month. (See our Education section)

PTEN closed Friday up fractionally at $22.48. The oil and natural-gas drilling company gapped higher on strong earnings numbers in early February but has been bouncing mostly between $22 and $25 since then. First-quarter results are scheduled for Thursday morning .

Friday's put trade made up almost all of PTU's total option volume of 2,585 contracts on Friday, which was 8 times its daily average for the last month. Only 35 calls changed hands, a reflection of the session's bearish sentiment.

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