Options Volume Explodes as Chesapeake Energy Corporation (CHK) Charges Higher

Chesapeake Energy Corporation (NYSE:CHK) is on pace for its best close in nearly five months

by Josh Selway

Published on Apr 12, 2016 at 2:13 PM
Updated on Jun 24, 2020 at 10:16 AM

Chesapeake Energy Corporation (NYSE:CHK) is eyeing its second straight double-digit percentage gain, with the shares 32.7% higher at $5.97 -- making the energy stock the leading advancer on the New York Stock Exchange. It's also the most-traded stock on the Big Board, and its intraday volume currently sits in the 100th percentile of its annual range. This enthusiasm has carried over into CHK's options pits, where traders are betting on both sides of the aisle.

By the numbers, CHK options volume is running at nine times the average intraday rate, and is on pace to set an annual high. The most popular option is the May 3.50 put. Over 31,000 contracts have traded at this strike, thanks to two simultaneous block trades of 20,000 and 10,000 contracts -- which may have been sold to open as part of a larger spread involving the May 5 put and 7 call.

Taking a step back, today's move higher is great news for recent call buyers. The stock's 10-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) comes in at 1.40, putting it in the 75th annual percentile. 

The analyst community is worth keeping an eye on, too. Seventeen of the 18 brokerage firms that cover CHK rate it a "hold" or worse. Plus, the stock's now trading above its consensus 12-month price target of $3.86. With this being the case, there's at least potential for bullish analyst attention in the future. 

As mentioned, Chesapeake Energy Corporation (NYSE:CHK) has exploded during the past two sessions, thanks to yesterday's news that the company amended its credit agreement. Moreover, CHK -- which is on pace for its best finish in roughly five months -- is also benefiting from a sector-wide rally in energy stocks.

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.


A Schaeffer's 39th Anniversary Exclusive!

8 Top Stock Picks for 2020

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


  
 
 

Partnercenter