Options Go Bearish on Chesapeake Energy

Chesapeake Energy is seeing bearish options activity ahead of its earnings report next week.

The company, which operates oil and natural gas wells, had run up some 20 percent in the last week but closed Tuesday down 4.66 percent to $17.99 as the price of crude continues to fall. CHK stock has inched up weakly today, gaining 8 cents at $18.07 by mid-morning.

Puts outnumbered calls by 1.5 to 1, according to OptionMonster's tracking systems.

The largest trades in CHK, which reports fourth-quarter results Feb. 17, centered on the out-of-the-money March 12.50 puts. The 5,600 puts trading at that strike doubled open interest of 2,830 by yesterday afternoon.

The trading preceded an announcement last night that Cheseapeake will launch a public offering of $300 million in its 9.5 percent senior notes due in 2015. CHK, which has already sold assets to raise cash, says it plans to use proceeds from the note offering to pay down debts.

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More Independent Oil & Gas Players:

Anadarko Petroleum

Devon Energy

Petrohawk Energy

Comstock Resources

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Jon 'DRJ' Najarian is a professional investor, CNBC contributor, and cofounder of OptionMonster.com.

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