On CNBC's "Options Action," Tony Zhang said that the some of the energy stocks are “becoming a way to play a leverage view on crude. SPDR S&P Oil & Gas Exploration & Production ETF XOP traded 1.2 times its average daily volume on Wednesday, he added.
Check out other assets making big moves in the premarket.
There was a buyer of 1,508 of the August 120 puts at $3.40 per contract on average, Zhang mentioned. The trader sees SPDR S&P Oil & Gas Exploration & Production ETF falling at least 10% by August expiration. Such trades could be a hedge against a long equity position or an outright bearish position, he added.
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