Consol Energy is trading at multi-year highs, and one large investor is repositioning for even more gains.
optionMONSTER's Heat Seeker shows that a trader sold 5,200 October 42 calls for the bid price of $4.55 and bought the same number of October 45 calls for the ask price of $2.90. Volume was below previous open interest in the lower contracts but above it in the higher strike, suggesting that a long position was rolled higher.
The trader would then be closing the October 42 calls and opening a new position at a strike that is $3 higher while taking some money off the table along the way. The new long calls are looking for CNX to rally above $45 by expiration in about four months, but the contracts could expire worthless if shares remain below that level. (See our Education section)
The October 42 were apparently bought at the end of March for $2.61 when the stock was below $40, so those contracts yielded a profit of more than 74 percent. It was just one of several bullish trades in CNX identified by our scanners in recent months, most recently after the company beat earnings estimates a little more than a month ago .
CNX rose 1.02 percent to $44.62 yesterday. The company, which has been transitioning from coal to shale energy, peaked at $45.57 on May 1--its highest price since October 2011--but has been trading in a tight range since then.
Total option volume in the name was just shy of 13,000 yesterday, more than 5 times its daily average for the last month. Overall calls outnumbered puts by a bullish 15-to-1 ratio.
More From optionMONSTER