Newfield Exploration Attracts Bearish Spread Trading
Bearish spread trading rose in oil and gas producer Newfield Exploration (NFX) Co for a second day in a row on Thursday, indicating some traders in the options market are worried about the stock trading lower in coming months.
The September-December put spread at $45 strike on Newfield Exploration traded 7,756 times at a cost of 40 to 50 cents per contract, on Thursday.
Options volume is at 7.5 times the norm, with 27,000 puts and 169 calls traded on Thursday, according to Trade Alert data.
"A buyer is apparently initiating the time spread and probably rolling a block of puts to December from September," said WhatsTrading.com options strategist Frederic Ruffy.
Similar activity was seen Wednesday when the September-December put spread at the $47 strike traded 7,150 times for 30 cents, and the September-December put spread at the $45 strike traded 4,975 times for 60 cents.
By rolling the in-the-money puts to December the investor appears to be expressing concern about possible declines in the stock in coming months, Ruffy said.
Newfield Exploration shares have shed about 13 percent of their value for the month to date. The shares were trading about flat at $39.21 on Thursday on the New York Stock Exchange, and are up 59 percent on the year so far.
(Reporting by Saqib Iqbal Ahmed; Editing by Chizu Nomiyama)
