Shares of Linn Energy (LINE) are trading lower on the session by 0.42%, at $40.70. The stock has been consolidating above the 50-day and 200-day moving averages for the past two months, recently popping to a four-month high.
With shares nearing the $40.80 historical resistance level, some traders are taking the opportunity to buy puts on LINE. Early in the session, the January 2013 $41.00 put was purchased 1,500 times, on the offer, for $2.20. Open interest on the strike is only 192 contracts, indicating fresh positioning.
The October $40.00 put was also purchased 500 times, on the offer, for $0.60. Open interest is only 313 contracts.
Put volume is now running at 5.5x the daily average with 2,686 puts traded.
Near-term implied and historical volatility is registering 14% and 12%, respectively.
Linn Energy, LLC is an independent oil and natural gas company. The company’s properties are located in the United States, primarily in the Mid-Continent, the Permian Basin, Michigan, California and the Williston Basin. Mid-Continent Deep includes the Texas Panhandle Deep Granite Wash formation and deep formations in Oklahoma and Kansas.