Options Intelligence Report: Consol Energy, Inc. (CNX) & iShares Silver Trust ETF (SLV)
CNX ñ Consol Energy, Inc.
The multi-fuel energy producer and energy services provider received a vote of confidence by one options investor who sold put options to finance the purchase of a long bull call stance on the stock in the May contract. Consol Energyís shares are trading 1.15% higher this afternoon to stand at $46.44. The optimistic options player targeted the May $46 strike price to sell 5,000 puts for an average premium of $2.60 apiece in order to partially offset the cost of buying the same number of now in-the-money calls for about $3.09 each. The net cost of the bullish risk reversal play amounts to $0.49 per contract, and prepares the investor to amass profits should Consolís shares rally above the effective breakeven price of $46.49 ahead of expiration day in May.
SLV ñ iShares Silver Trust ETF
A chunk of married put options purchased on the iShares Silver Trust, an exchange-traded fund that reflects the price of silver owned by the Trust at any given time less the Trustís expenses and liabilities, suggests one investor is taking a cautiously optimistic stance on the fund. Shares of the SLV dipped 0.95% lower to stand at $17.84 as of 2:25 pm (ET). It looks like one investor purchased approximately 17,000 puts at the July $17 strike for an average premium of $0.56 each in combination with the purchase of shares of the underlying fund for approximately $18.11 apiece. The effective price paid for the shares, when factoring in the added cost of the put contracts, amounts to about $18.67 per share. The nature of the transaction indicates the investor is hoping to see shares of the ETF appreciate going forward. However, the trader is also willing to shell out extra premium to insure the value of the underlying position with put options in case shares plummet ahead of expiration in July. Downside protection kicks in if shares of the underlying fund fall 7.85% from the current price of $17.84 to breach the breakeven point on the puts at $16.44 by July expiration day.
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