Put seller sees floor under Halcon
Halcon Resources has seen its stock price cut in half in the last year, but one trader is betting that further downside will be limited in the next five months.
optionMONSTER's tracking systems detected the purchase of 3,000 October 4 puts for $0.25 at the same second yesterday. This is clearly a new position, as the volume was nearly 7 times higher than the strike's open interest of only 445 contracts before the trade appeared.
The put seller is looking for HK to stay above the $4 strike price through expiration in mid-October. If it falls below that level, the trader will be on the hook to buy shares at an effective price of $3.75 when the $0.25 credit from the put sale is subtracted.
HK closed fractionally higher yesterday at $5.41 after dipping to $5.27 in midday trading, just a penny above its 52-week low of $5.26 reached on Nov. 12. The oil and gas company had climbed above $8 in mid-April but then sold off sharply and has been been trending lower ever since. Shares are down more than 50 percent since trading at 52-week highs above $11 in June 2012.
Total option volume in the name surpassed 10,000 contracts yesterday, quadruple its daily average for the last month.
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