U.S. Markets closed

Range-bound play targets PG&E

Chris McKhann (chris.mckhann@optionmonster.com)

A large trade is looking for shares of Pacific Gas & Electric to stay range-bound through the end of summer.

optionMONSTER systems show that corresponding blocks of 5,000 September 45 puts and 50 calls each went for $0.55 this morning, on the bid side for both, suggesting that the trader is selling a strangle . Volume was well above the previous open interest in each strike, indicating that this is new positioning.

The short strangle is looking for PCG to stay trapped between $45 and $50 through expiration in mid-September. The implied volatility of the options is around 17 percent, while the historical volatility for the stock is down at 10 percent. (See our Education section)

PCG is down 0.79 percent to $47.81 this morning. The California utility company have been trending up from support at $43 in the last month and reached a multi-year high of $48.64 on Friday.

More From optionMONSTER