Chesapeake Energy Corporation (CHK) Bulls See a Round-Number Breakout

Chesapeake Energy Corporation's (CHK) July 20 call is in focus today

Mar 4, 2015 at 1:56 PM
facebook X logo linkedin

Chesapeake Energy Corporation (NYSE:CHK) is sliding in step with oil today, down 5.3% at $15.35 -- and earlier hit a two-year low of $15.34. Options traders are paying no mind, however, and are scooping up calls at a rate two times the intraday average.

Most active in CHK's options pits this afternoon is the July 20 call, where it appears new positions are being purchased. By buying the calls to open, speculators are gambling on CHK to break through the round-number $20 mark by the close on Friday, July 17 -- when the options expire. Amid today's plunge, delta on the call has dropped to 0.15 from 0.20 at last night's close, suggesting a decreased probability of an in-the-money finish.

From a wider sentiment perspective, today's accelerated call activity runs counter to the withstanding trend. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), CHK's 50-day put/call volume ratio of 1.34 ranks in the 82nd annual percentile, meaning puts have been bought to open over calls at a faster-than-usual clip in recent months.

The prevailing skepticism among options traders -- as well as analysts -- more closely aligns to CHK's dismal technical showing. In fact, since topping out at a two-year high of $29.92 last July, the shares have shed almost half their value. Given this disappointing price action, it's possible that some of today's call buying at the out-of-the-money July 20 strike could be a result of short sellers protecting their bearish bets against any unexpected upside. Currently, a healthy 10.6% of Chesapeake Energy Corporation's (NYSE:CHK) float is sold short.


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI