Chesapeake Energy Corporation (CHK) Traders Grow Increasingly Bearish

Bearish betting has been gaining in popularity on Chesapeake Energy Corporation

by Karee Venema

Published on Nov 25, 2014 at 12:13 PM
Updated on Apr 20, 2015 at 5:32 PM

Chesapeake Energy Corporation (NYSE:CHK) puts are crossing the tape at a rate nearly four times what's typically seen at this point in the day, and are outpacing calls by roughly 3-to-1 margin. The stock's short-term contracts are in high demand, too, as evidenced by the equity's 30-day at-the-money implied volatility (IV), which has jumped 7.4% to 36.4% -- in the 83rd percentile of its annual range.

Most active by a mile is CHK's weekly 11/28 23.50-strike put, where 12,135 contracts have changed hands. (As a point of comparison, the next most active option has fewer than 950 contracts on the tape.) The majority of the positions at this near-the-money put have gone off at the ask price, IV has surged 11.1 percentage points, and volume outstrips open interest, making it safe to assume new positions are being initiated.

Although analysts have recently expressed optimism toward CHK, today's bearish positioning among option traders isn't too surprising, considering the equity has shed almost 21% since hitting a two-year peak of $29.92 in early July to trade at $23.73. What's more, it echoes the withstanding trend seen at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, Chesapeake Energy Corporation's (NYSE:CHK) 10-day put/call volume ratio of 1.15 across this trio of exchanges ranks in the 88th annual percentile, meaning puts have been bought to open over calls at a faster-than-usual clip in recent weeks.


A Schaeffer's exclusive

TOP STOCK PICKS 2020

Access your FREE insider report before it's too late!


 
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


IRA/401k: The Crash-Proof Retirement Plan
Use gold to protect any IRA, 401(k), or retirement account from a looming financial crisis.
Stocks Eye Notable Weekly Gains on 3-Day Surge
Stocks are eyeing big weekly gains
WW Stock Brushes Off Bull Note
Morgan Stanley upgraded the Weight Watchers parent to "overweight" from "equal weight"
IRA/401k: The Crash-Proof Retirement Plan
Use gold to protect any IRA, 401(k), or retirement account from a looming financial crisis.