A three-way combination trade looking for Consol Energy to rally by early next year.
optionMONSTER systems show that a block of 12,373 January 43 calls was bought for the ask price $0.85 yesterday, while the same number of the January 47 calls and January 34 puts were sold for $0.22 and $0.66 respectively. Volume was above the previous open interest in all three strikes, so this is clearly new positioning.
The trader is opening a bullish call spread , looking for gains up to or beyond $47 at expiration. He or she is also selling the puts to further offset the cost of the spread.
In doing so, the trader actually takes in a credit of $0.03, so there is no risk in the trade between $34 and $43. But the trader will be on the hook to buy 1,237,300 shares of CNX if it trades below $34 put strike. (See our Education section)
The stock finished the day at $38.87, up fractionally on the day. The coal and natural-gas producer has been trending lower from above $48 in June, but it has been holding between $41 and $38 since late July.
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