A large trade is betting that Spectra Energy will rebound by spring.
optionMONSTER's tracking systems show that a trader bought 10,000 March 38 calls for the ask price of $0.45 and sold the same number of March 30 puts for $0.47. The volume dwarfed the previous open interest in each strike, indicating that this is a new combination trade.
A rally would boost the price of the long calls while decreasing the value of the puts that were sold . But the opposite will occur if the stock drops, and the trader will be on the hook to buy shares if they fall below $30 by expiration in mid-March. (See our Education section)
SE was up a penny yesterday to close at $33.94. The natural-gas storage and pipeline company had quickly recovered from the broader market selloff in mid-December but hit resistance at the $37 level and this week fell back near last month's lows.
Yesterday's combination trade pushed total option volume in SE to 22,705 contracts, more than 14 times its daily average for the last month.
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