Whiting Petroleum has lost nearly three-quarters of its market value in recent months, but traders are betting that further declines will be limited.
optionMONSTER's monitoring programs show that more than 12,500 April 4 puts were sold for $0.40 yesterday. These are clearly new positions, as open interest in the strike was just 55 contracts before the trades appeared.
Short puts lock in a price where investors must buy a stock, while letting them collect premium. Traders use the technique when they like a stock and think that the risk of a big drop is limited. (See our Education section)
WLL rose 19.54 percent to $5.20 yesterday but is down 73 percent in the last three months. The oil and gas producer's next quarterly results are estimated to come out after the close on April 27, well after yesterday's short puts expire.
Overall option volume in the name was 3 times greater than average yesterday.
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