A large trader is making a long-term bet on the coal industry with Consol Energy.
optionMONSTER’s Heat Seeker monitoring program detected the purchase of 6,000 January 39 calls for $1.08 and the sale of 3,000 January 29 puts for $2.48. The transaction accounted for almost all the volume in the Pennsylvania-based company so far today.
Buying calls makes the investor long the stock, while selling puts creates potential downside risk. Combining the two results in a position that’s similar to owning shares, but with strong leverage to the upside. This type of trade is often known as bullish combination or bullish “risk reversal.”
— Option Monster