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NiSource is facing a nervous trade

David Russell (david.russell@optionmonster.com)

An investor is nervous about NiSource, which has trended steadily higher for the last four years.

optionMONSTER's Depth Charge monitoring system detected the purchase of about 5,100 April 28 puts for $0.25to $0.45. Some 15 minutes later, 1,900 April 29s were bought for $0.80 to $1.10. Volume was more than 20 times open interest at each strike.

NI fell 0.42 percent to $28.39 on Friday. It fell sharply after the puts traded, likely because the market maker had to hedge his or her position after selling the contracts.

The Indiana-based utility has moved higher in a virtually straight line since the market bottomed in early 2009 and is now back to the price range where it fell hard in mid-2001. That could make some chart watchers think it's at resistance and expect a pullback. (See our Education section for other hedging strategies.)

Total option volume was 20 times greater than average in the session, according to Depth Charge. Puts outnumbered calls by more than 900 to 1.

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