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Occidental draws huge put sale

Mike Yamamoto (mike.yamamoto@optionmonster.com)

A huge trade is betting on a floor beneath shares of Occidental Petroleum even with the stock at its lowest levels in more than a year.

optionMONSTER's tracking systems detected the sale of 19,364 February 70 puts in a single print for $3.10. That volume was more than 15 times the strike's open interest of 1,237 contracts at the start of the session, clearly indicating a new position.

OXY slipped 0.15 percent on Friday to close at $73.81, its worst close since September 2011, after hitting a 52-week low of $72.43 earlier in the session. The oil and natural-gas company's shares have been in a steep decline since trading above $90 only a month ago.

Friday's put seller apparently believes that OXY will be above the $70 strike price at expiration in mid-February. If the stock is below that level, the trader faces the obligation to buy shares at an effective price of $66.90 once the credit from the put sale is factored in. (See our Education section)

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