“Traders are picking up puts on the U.S. Natural Gas Fund after the exchange-traded fund gapped lower this morning. The UNG opened down more than 2.6 percent after trying unsuccessfully to break above $11 during the last two sessions. The fund is down more than 50 percent from a year ago as it has continued to trend lower over the year, hitting an all-time low of $8.50 at the beginning of December. The price has clearly rallied off that low and has found support at the $10 level since mid-December,” Option Monster Reports.

“Today’s options action is looking for a break below that level in the next six months. More than 12,000 July 9 puts have been bought this morning, with the largest block of 3,000 contracts bought for $0.84. This volume is against open interest of 2,864, so it represents new opening positions,” Option Monster Reports.

“The put buying certainly appears bearish at first blush, but it may have been done as protection against long shares, which creates a so-called synthetic call position (as I discussed in yesterday’s webinar on synthetics). Given the longer-term nature of these puts, I would suspect that it is protective buying,” Option Monster Reports.

 

 Here is a look at the options activity for July 2010 below:

CALL OPTIONS

Expire at close Fri, Jul 16, 2010

Strike Symbol Last Chg Bid Ask Vol Open Int 4.00 UNYGD.X 6.75 0.00 6.25 6.50 10 10 5.00 UNYGE.X 5.55 0.00 5.30 5.55 5 449 6.00 UNYGF.X 4.75 0.00 4.35 4.60 1 5 7.00 UNYGG.X 3.60 0.15 3.50 3.70 1 476 8.00 UNYGH.X 2.88 0.42 2.80 2.86 10 395 9.00 UNYGI.X 2.45 0.00 2.15 2.19 12 1,920 10.00 UNYGJ.X 1.62 0.14 1.62 1.66 8 1,674 11.00 UNYGK.X 1.24 0.12 1.20 1.24 160 4,941 12.00 UNYGL.X 0.92 0.05 0.89 0.92 206 5,502 13.00 UNYGM.X 0.67 0.05 0.66 0.69 220 2,371 14.00 UNYGN.X 0.63 0.00 0.49 0.52 7 1,726 15.00 UNEGO.X 0.38 0.06 0.37 0.40 1 302 16.00 UNEGP.X 0.33 0.00 0.28 0.32 10 602 17.00 UNEGQ.X 0.27 0.00 0.22 0.26 31 579 18.00 UNEGR.X 0.18 0.04 0.17 0.21 387 2,132 19.00 UNEGS.X 0.14 0.04 0.14 0.17 26 624 20.00 UNEGT.X 0.12 0.06 0.11 0.14 567 171

PUT OPTIONS

Expire at close Fri, Jul 16, 2010

Strike Symbol Last Chg Bid Ask Vol Open Int 5.00 UNYSE.X 0.05 0.00 0.05 0.09 500 1,064 6.00 UNYSF.X 0.12 0.01 0.12 0.15 100 429 7.00 UNYSG.X 0.25 0.05 0.24 0.27 141 600 8.00 UNYSH.X 0.48 0.04 0.47 0.49 331 4,793 9.00 UNYSI.X 0.81 0.06 0.80 0.83 12,423 2,864 10.00 UNYSJ.X 1.28 0.10 1.27 1.29 376 7,030 11.00 UNYSK.X 1.84 0.12 1.84 1.87 18 1,944 12.00 UNYSL.X 2.54 0.11 2.52 2.56 24 236 13.00 UNYSM.X 3.30 0.15 3.25 3.35 10 3,598 14.00 UNYSN.X 3.95 0.00 4.10 4.20 42 1,578 15.00 UNESO.X 5.00 0.38 5.00 5.10 81 44 16.00 UNESP.X 5.55 0.00 5.85 6.00 150 244

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