Paper sold 20,000 ECA June 7 puts & bought 20,000 June .6 puts.
Encana Corp., trading 7.51 (down .03) with an IV30 of 66.09 and an HV10 of 80.71, saw a put spread trade today.?? The stock, with an ADV of 4600 and an IV30 of 137,000 contracts, saw a customer sell the June 7/6 put spread.? The customer sold 20,000 of the June 7 puts at .35 and bought 20,000 of the June .6 puts for .13, net the trader collect .22 on the put spread.
This is a bet that ECA is going to stay above 7 between now and June expiration.? But the trader is afraid that the underlying Might tank if the stock does drop.? In addition this allows the trader to margin up the amount spread he or she is trading.? This is an income play for the most part.
This trade is bearish volatility and mildly bullish.