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Rex Energy draws puts at highs

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Rex Energy is facing a downside position with shares just off their highest level in five years.

optionMONSTER's Depth Charge system shows that 2,250 March 15 puts were bought in one print for $0.65. This is a new position, as there was no open interest in the strike before the trade appeared.

These puts lock in the price where the stock can be sold through mid-March no matter how far it might fall. The trader could be using them to hedge a long position or to make an outright bearish bet, but either way they will expire worthless if shares remain above $15. (See our Education section)

REXX rose 1.43 percent to $21.26 yesterday. The oil and natural-gas producer reported earnings on Aug. 6 and peaked at $22.08 two days later, its highest price since the mortgage crisis began in September 2008. The stock last traded below $15 on May 1.

Yesterday's put buying made up almost all of the options that traded in REXX, volume that was 8.5 times its daily average for the last month. Overall puts outnumbered calls by more than 8 to 1.

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