From Schaeffer's Research:
Chesapeake Energy Bears Hit the Gas
Bearish speculation ramped up on Chesapeake Energy Corporation (NYSE:- 20.03) during the course of Thursday's session, as approximately 39,000 put options changed hands -- representing 1.65 times the norm. Meanwhile, only about 22,000 calls were traded, falling just short of CHK's average daily call volume.
The most active option was the natural gas giant's September 17 put, where 11,460 contracts crossed the tape. About 94% of these traded at the ask price, indicating they were bought, and implied volatility rose 2.2 percentage points by the close to 57.7%. This front-month put saw a big jump in open interest overnight, and now carries 24,989 contracts.
Based on the volume-weighted average price (VWAP) of $0.16, yesterday's put buyers need CHK to fall below $16.84 by the time front-month options expire. From a broad perspective, the bearish momentum is working in their favor; the stock is down more than 38% over the last 52 weeks....MORE