| Butterfly takes wing over Concho | |
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A large trader is targeting a key level in Concho Resources using a complex leveraged strategy.
optionMONSTER's Heat Seeker monitoring program detected the purchase of 5,000 September 130 calls for $5.90. A block of 10,000 September 140s was sold for $2.55 and 5,000 September 150 calls were bought for $1.10. Volume exceeded open interest across the board, which means that this a new butterfly spread .
It cost $1.90 up front and will expand to $10 if the fast-growing energy driller closes at $140 on expiration. Long calls lock in the price where a stock can be bought, while selling them creates an obligation to deliver shares if a certain level is reached. The butterfly uses income from selling more contracts at the middle strike to leverage a move to that level, but gains diminish above or below. (See our Education section)
CXO rose 1.65 percent to $122.25 yesterday and has outperformed both its sector and the S&P 500 by gaining 23 percent so far this year. The stock is also above its 200-day moving average, unlike most other energy companies.
Yesterday's butterfly is noteworthy because it targets the same $140 area where CXO stalled last summer before crashing over the winter. Some chart watchers may expect that level to now become resistance.
Total option volume was 26 times greater in the session, with calls outnumbering puts by a bullish 55-to-1 ratio.
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Concho Resources Inc.
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CODE : CXO |
ISIN : US20605P1012 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Concho Resources is a exploration company based in United states of america. Concho Resources is listed in United States of America. Its market capitalisation is US$ 9.6 billions as of today (€ 7.9 billions). Its stock quote reached its highest recent level on July 05, 2019 at US$ 99.97, and its lowest recent point on January 15, 2021 at US$ 65.60. Concho Resources has 146 059 000 shares outstanding. |