Puts Purchased on Linn Energy

Options Unusual Activity

Posted September 17th, 2012 by The Options Insider in Unusual Activity

Shares of Linn Energy (LINE) are trading lower on the session by 0.42%, at $40.70. The stock has been consolidating above the 50-day and 200-day moving averages for the past two months, recently popping to a four-month high.

With shares nearing the $40.80 historical resistance level, some traders are taking the opportunity to buy puts on LINE. Early in the session, the January 2013 $41.00 put was purchased 1,500 times, on the offer, for $2.20. Open interest on the strike is only 192 contracts, indicating fresh positioning.

The October $40.00 put was also purchased 500 times, on the offer, for $0.60. Open interest is only 313 contracts.

Put volume is now running at 5.5x the daily average with 2,686 puts traded.

Near-term implied and historical volatility is registering 14% and 12%, respectively.

Linn Energy, LLC is an independent oil and natural gas company. The company's properties are located in the United States, primarily in the Mid-Continent, the Permian Basin, Michigan, California and the Williston Basin. Mid-Continent Deep includes the Texas Panhandle Deep Granite Wash formation and deep formations in Oklahoma and Kansas.