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Options Action: Chesapeake

Wednesday, 2 Jun 2010 | 5:55 PM ET

If you're gaming energy in the wake of the BP catastrophe, you might want to consider this options trade.

Mike Khouw of Cantor Fitzgerald suggests a 'risk reversal' in Chesapeake Energy. His trade follows:

Buy July 24 Strike Call for $0.60
Sell July 20 Strike Put for $0.60

How Mike's Trade Makes Money
Get long stock at $20
Profits above $24

Learn more about this trade. Watch the video now!

Options Action
A look at the cautious, bullish bets, with Mike Khouw, Cantor Fitzgerald.





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Trader disclosure: On June 2, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Terranova Owns (SWN), (GLD), (IPSU), (RSX), (PFE), (TER), (APA), (AXP), (BMO), (BBY), (DIS), (XCO), (AAPL), (CVS), (IPI), (TEVA), (FXB); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT); Kelly Owns (FXE) Calls; Kelly Owns (IBM) Calls; Kelly Owns (STD) Calls; Kelly Owns (NBG) Calls; Jon Najarian Owns (GS), (JPM), (CAM), (BP); Finerman’s Firm Owns (AAPL); Finerman Owns (BAC); Finerman’s Firm Owns (BAC); Finerman Owns (BBY); Finerman’s Firm Owns (BBY); Finerman Owns (BP) Calls; Finerman’s Firm Owns (GOOG); Finerman’s Firm Owns (GS) Calls; Finerman Owns (HPQ); Finerman’s Firm Owns (HPQ); Finerman Owns (JPM) Calls; Finerman’s Firm Owns (JPM); Finerman Owns (RIG) Call, Puts & Stock

For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, LTD.
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (DRYS)

For Brian Kelly
Kanundrum Owns (IBM)
Kanundrum Owns (XLK)
Kanundrum Owns (GFI)
Kanundrum Owns (FCX)
Kanundrum Owns (CLF)
Kanundrum Owns (GLD)
Kanundrum Owns (AUY)
Kanundrum Owns (GFI)
Kanundrum Owns (STD)
Kanundrum Owns (NBG)
Kanundrum Is Short (CME)
Kanundrum Is Short (STT)
Kanundrum Is Short (XLF)

For Collin Gerry
Raymond James & Associates co-managed a follow-on offering of (HERO) in Sept. 2009 Raymond James & Associates is a nasdaq market maker in (HERO) Raymond-James & Associates received non-securities-related compensation from (HERO) in past 12 months

For David Levy
Levy Owns U.S. Tresuries
Levy Own Options In Euro-Dollars Futures
Levy Own Gold

For Mike Khouw


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