Long-term bullish bet on Consol Energy

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.”

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