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By Ainvest in options-flow —

CRK Massive $11M Call Sale - Institutional Trader Locks in Natural Gas Rally Gains!

$11M whale trade on CRK. Someone just dumped $11 MILLION worth of CRK calls this morning at 11:34:22! This monster trade sold 38,000 contracts of $35 strike calls expiring November 20, Complete analysis reveals technical setup, catalyst drivers, and actionable entry points for re

💎 CRK Massive $11M Call Sale - Institutional Trader Locks in Natural Gas Rally Gains! 💰

📅 November 26, 2025 | 🔥 Unusual Activity Detected

🎯 The Quick Take

Someone just dumped $11 MILLION worth of CRK calls this morning at 11:34:22! This monster trade sold 38,000 contracts of $35 strike calls expiring November 20, 2026 - locking in profits on Comstock Resources after its explosive +38.5% YTD rally fueled by surging natural gas prices. With CRK trading at $25.95 and natural gas futures at $4.55/MMBtu (more than double 2024 levels), a sophisticated trader is taking chips off the table just as the stock approaches analyst targets. Translation: Smart money is banking massive gains before the winter heating season plays out!

📊 Company Overview

Comstock Resources (CRK) is a pure-play natural gas producer capitalizing on the LNG export boom:
- Market Cap: $7.37 Billion
- Industry: Crude Petroleum & Natural Gas
- Current Price: $25.95 (near YTD high of $30.85)
- Primary Business: Independent natural gas producer operating exclusively in the Haynesville shale basin (North Louisiana and East Texas), positioned to supply surging Gulf Coast LNG exports

💰 The Option Flow Breakdown

The Tape (November 26, 2025 @ 11:34:22):

Time Symbol Side Buy/Sell Type Expiration Premium Strike Volume OI Size Spot Option Price
11:34:22 CRK ASK SELL CALL $35 2026-11-20 $11M $35 38K 4 38,000 $25.95 $2.96

🤓 What This Actually Means

This is a massive profit-taking move after CRK's incredible natural gas rally! Here's what went down:

  • 💸 Huge premium collected: $11M ($2.96 per contract × 38,000 contracts)
  • 🎯 Strategic strike: $35 represents 34.9% above current price - selling upside beyond analyst targets
  • ⏰ Long-dated expiration: 359 days to expiration captures entire winter 2025-2026 heating season, Q4 2025 earnings (Feb 2026), and Shelby Trough asset sale closing
  • 📊 Size matters: 38,000 contracts represents 3.8 million shares worth ~$98.6M
  • 🏦 Institutional profit lock: This is sophisticated portfolio management, not a bearish bet on natural gas

What's really happening here:
This trader likely accumulated a HUGE long position in CRK stock during the brutal 2024 natural gas downturn when prices crashed to $2.10/MMBtu. Now, with natural gas futures at $4.55/MMBtu (more than double!) and CRK up +38.5% YTD from $18.70 to $25.95, they're selling $35 strike calls to generate income and cap upside. They collect $2.96 per share immediately, and if CRK rallies above $35 by November 2026, they're happy to sell at 35% gains from current levels. Think of it like selling a covered call on steroids - they're banking $11M in premium while keeping the stock position.

Unusual Score: 🔥 EXTREME (7,687x average size) - This happens maybe once in a blue moon! We're talking about a trade larger than most retail traders will see in their entire career. The Z-score of 1,323.76 means this is literally off-the-charts unusual - we've NEVER seen a larger CRK options trade in the past 30 days.

Down-to-earth context: This trade is 7,687 times larger than the average CRK options trade. To put that in perspective, if the typical CRK trade is like buying groceries for $100, this trade is like buying a $768,700 mansion. It's a few times per year event, not "once in a lifetime" - but definitely noteworthy!

📈 Technical Setup / Chart Check-Up

YTD Performance Chart

CRK is absolutely crushing it - up +38.5% YTD with current price of $25.89 (started the year at $18.70). The chart tells a classic energy commodity recovery story - after a brutal 51.1% max drawdown in August when natural gas prices bottomed out at $15.39, CRK rocketed from the lows to approach $26 as natural gas futures doubled.

Key observations:
- 🚀 V-shaped recovery: Sharp bounce from $15.39 August lows to $30.85 peak in June-July on improving natural gas fundamentals
- 📈 Consolidation phase: Trading in $23-26 range since October as market digests gains and awaits catalyst clarity
- 🎢 High volatility: 59.0% annualized vol shows this is an energy stock tied to commodity swings, not a stable dividend play
- 📊 Volume surge: Massive institutional accumulation during $15-20 lows in August-September as smart money positioned for natural gas recovery
- ⚠️ Resistance zone: Stock struggling at $26 level - needs catalyst to break higher toward $30+ 2025 peaks

Gamma-Based Support & Resistance Analysis

Current Price: $25.88

The gamma exposure map reveals where options positioning creates price magnets and barriers:

🔵 Support Levels (Put Gamma Below Price):
- $25.00 - Immediate psychological support (round number typically attracts put buyers)
- $24.00 - Secondary support zone where dip buyers likely emerge
- $23.00 - Major structural floor aligned with October consolidation lows
- $22.00 - Deep support representing August recovery starting point

🟠 Resistance Levels (Call Gamma Above Price):
- $26.00 - Immediate ceiling (current trading range top - stock struggling here for weeks!)
- $27.00 - Secondary resistance representing breakout level (1.5% overhead)
- $25.00 - Ironically also showing mixed gamma from straddling positions at this psychological level

What this means for traders:
CRK is trading in a TIGHT consolidation range between $23-26 with resistance clearly visible at the $26 ceiling. The gamma chart shows limited options positioning overall (smaller bars vs. high-volume mega-caps), which makes sense for a mid-cap energy stock. This setup screams "waiting for catalyst" before the next big move. The stock needs a clear break above $26 on volume to challenge the June highs near $31, or a break below $23 would signal renewed weakness.

Notice anything? The call seller struck at $35 - well above ANY visible gamma resistance on the chart. They're betting CRK won't reach analyst price targets or make new highs through November 2026. This is a "cap the upside at acceptable profit" trade, not a "stock is topping here" trade. Big difference!

Implied Move Analysis

Options market pricing for upcoming expirations:

  • 📅 December 19 Triple Witch (23 days): ±$2.49 (±9.78%) → Range: $22.20 - $27.54
  • 📅 January 16 Monthly OPEX (51 days): ±$3.48 (±13.69%) → Range: $20.11 - $28.91
  • 📅 February 20 Monthly OPEX (86 days): ±$6.16 (±24.21%) → Range: $18.08 - $30.24
  • 📅 November 20, 2026 (THIS TRADE - 359 days): ±$18.30 (±71.95%) → Range: $1.64 - $40.98

Translation for regular folks:
Options traders are pricing in a 10% move ($2.49) through December Triple Witch which captures the critical winter heating season pricing and potential Q4 2025 earnings volatility. The market expects moderate volatility for a natural gas stock - nothing crazy like earnings binary events, but meaningful commodity-driven swings.

The November 2026 expiration (when this $11M trade expires) has an upper range of $40.98 - meaning the market thinks there's a possibility CRK could rally as high as $40 over the next year if natural gas prices sustain $4-5/MMBtu and Western Haynesville drilling delivers. However, the $35 strike call seller is capping upside at $35 (+35% from current), willing to miss potential gains above that in exchange for $11M in immediate income.

Key insight: The 72% implied move over one year reflects the high uncertainty in natural gas prices. Smart money is selling premium at elevated volatility levels to capitalize on uncertainty while maintaining stock exposure.

🎪 Catalysts

🔥 Immediate Catalysts (Next 30 Days)

Shelby Trough Asset Sale Closing - Expected December 2025 💰

CRK entered into an agreement to sell Shelby Trough properties in East Texas for $430.0 million with closing expected in December 2025:

  • 💵 Transaction Details: Selling interests in 155 producing wells (74.5 net) and ~36,000 net acres
  • 📉 Production Divested: 9.3 MMcf/day net (relatively small piece of total production)
  • 💪 Strategic Purpose: Proceeds earmarked for debt reduction to focus capital on high-return Western Haynesville development
  • 📊 Financial Impact: Will reduce net debt-to-EBITDA to ~0x vs. peer average of 1.14x, creating liquidity exceeding $900M post-transaction

Why this matters: The $430M proceeds give CRK massive financial flexibility to accelerate Western Haynesville drilling without relying on external financing. This transforms the balance sheet from "good" to "fortress-level" strong. However, the market has largely priced this in since the October announcement - don't expect a huge pop on closing.

Winter Natural Gas Price Action (November 2025 - March 2026) ❄️

Natural gas prices are forecasted to average $3.90/MMBtu during winter 2025-2026, peaking at $4.25/MMBtu in January 2026:

Current setup: Natural gas futures at $4.55/MMBtu already reflect strong winter expectations. Further upside requires sustained cold weather or production disruptions. CRK's realized prices run slightly behind Henry Hub futures due to hedging ($2.99/Mcf after hedging in Q3 2025).

🚀 Near-Term Catalysts (Q1 2026)

Q4 2025 Earnings Release (Expected Late February 2026) 📊

CRK typically reports quarterly results 4-6 weeks after quarter end, putting Q4 2025 earnings around late February 2026:

  • 📈 Production Guidance: 1,200-1,300 MMcfe/day for Q4 2025 (up from Q3's 1,222 MMcfe/day average)
  • 💵 Capex Guidance: $250-300M in drilling and completion costs for Q4 2025
  • 🎯 Key Metrics to Watch:
  • Realized natural gas prices vs. Q3 2025 ($2.99/Mcf after hedging) - should improve meaningfully with Henry Hub at $4.55
  • Western Haynesville well performance - recent wells averaging 28-40 MMcf/d initial production
  • Operating cash flow generation - Q3 delivered $190.4M (excluding working capital changes)
  • Updates on 2026 drilling program and capital budget
  • Impact of Shelby Trough sale on debt reduction

What to expect: Earnings should show strong sequential improvement in realized prices as Q4 captured rising natural gas prices. The key debate will be 2026 capital allocation - does management accelerate Western Haynesville development or maintain discipline?

Western Haynesville Delineation Results (Ongoing) 🏭

CRK has assembled over 518,000 net acres in Western Haynesville at an average cost of $600/acre, positioning for transformative growth:

Why this matters: Western Haynesville represents the "growth engine" that could transform CRK from a mature Haynesville producer to a growth story. Jerry Jones stated he sees "$100 billion present value" in Western Haynesville resources based on internal analysis. However, the play remains under-delineated with well performance variability - geology risk persists across the massive 518,000 net acre position.

📊 Medium-Term Catalysts (2026)

Natural Gas Price Trajectory for 2026 📈

Full year 2026 Henry Hub expected to average $4.00/MMBtu, representing 16% increase vs. 2025 average:

2026 Drilling Program Expansion 🛢️

CRK increased from 5 to 7 operating rigs during 2025, with potential for further expansion in 2026:

  • 📋 2025 Program: 33 wells to drill, 35 wells to turn to sales in Legacy Haynesville; 4 rigs on Western Haynesville delineation
  • 🎯 Horseshoe Well Focus: Plan to drill 8 horseshoe wells in 2025, 10 in 2026, leveraging 118 future horseshoe locations
  • 💰 Total 2025 Capex: $1.0-1.1B for drilling 46 operated horizontal wells (40.3 net)
  • 🔮 2026 Outlook: Likely similar or increased budget if natural gas prices sustain $4+ levels and Shelby Trough proceeds deployed

⚠️ Risk Catalysts (Negative)

Jerry Jones Going-Private Speculation 🤔

Some analysts have questioned whether Jerry Jones (71% owner) may pursue taking Comstock private given his controlling stake:

  • 🏈 Background: Jones has invested over $1 billion in CRK, acquiring shares at $8-12 during 2024 downturn
  • 💰 Recent Accumulation: Jones entities acquired 12.5M shares at $8.04 in March 2024, plus 13.4M shares at $8-11.54 in August 2024
  • ⚖️ Probability: Low to moderate (speculative, no concrete evidence) - but meaningful premium could be offered if Jones seeks full ownership
  • 📉 Downside for Public Shareholders: Going-private deal might be struck at modest premium to average analyst target ($19.60), well below current $25.95 price

Inventory Depletion & Rig Count Risk 🛢️

Some Haynesville operators could exhaust inventory by year-end, impacting rig count and production growth industry-wide:

  • 📊 Basin-Wide Issue: Haynesville characterized as "swing production" basin due to dry gas focus and higher total costs vs. Marcellus/Permian
  • 💸 Cost Pressure: Haynesville's deep formations require significant capital - cost overruns could pressure economics
  • 🎯 CRK Specific: Western Haynesville delineation carries geological risk - well performance variability could disappoint if rock quality inconsistent across 518,000 net acres

🎲 Price Targets & Probabilities

Using gamma levels, implied move data, and upcoming catalysts, here are the scenarios through November 2026 expiration:

📈 Bull Case (30% probability)

Target: $32-$38

How we get there:
- 💪 Natural gas prices SUSTAIN $4.50-5.00/MMBtu range through 2026 on robust LNG export demand
- 🚀 Western Haynesville delivers consistently - wells averaging 35+ MMcf/d initial production across broader acreage
- 🤖 Q4 2025 earnings CRUSH estimates with realized prices approaching $3.50/Mcf (vs. $2.99 in Q3)
- 📊 2026 drilling program expansion announced (9-10 rigs) capitalizing on $430M Shelby Trough proceeds
- 🌐 CRK gains market recognition as premier Gulf Coast LNG supplier - multiple expansion to peer valuations
- 🇺🇸 No major recession or demand destruction
- 📈 Breakout above $27 resistance triggers technical rally toward $30-35 range

Key metrics needed:
- Production growth >10% YoY in 2026
- Operating cash flow exceeding $1B annually
- Western Haynesville contributing 25%+ of total production
- Realized gas prices averaging $3.25+ after hedging

Probability assessment: 30% because it requires sustained high natural gas prices AND flawless Western Haynesville execution. The implied move upper range of $40.98 suggests this is possible but not base case. CRK trading at premium valuation (EV/EBITDA 13.21x vs. 6.4x industry median) limits further multiple expansion.

🎯 Base Case (50% probability)

Target: $23-$30 range (CHOPPY CONSOLIDATION)

Most likely scenario:
- ✅ Natural gas prices trade $3.50-4.50 range through 2026 - solid but not spectacular
- 📱 Q4 2025 earnings meet/slightly beat with sequential price improvement but conservative 2026 guidance
- ⚖️ Western Haynesville delineation shows MIXED results - some great wells (35+ MMcf/d), some mediocre (20-25 MMcf/d)
- 🤖 Shelby Trough sale closes as expected, debt paid down, but no dramatic capital allocation change
- 🔄 Trading within $23-30 consolidation range as market awaits clearer Western Haynesville results
- 📊 No major upside or downside surprises - "steady as she goes" execution
- 💤 Stock stuck between gamma support ($23-25) and resistance ($26-27) for months

This is the call seller's target scenario: Stock consolidates in $23-30 range, calls expire worthless or with minimal value, and they bank the full $11M premium while keeping stock position. They're essentially saying "I'm happy if CRK stays below $35 through November 2026 - I'll collect $11M in income and participate in moves up to $35, missing only gains above that level."

Why 50% probability: Stock at consolidation phase after big YTD rally - natural gas fundamentals solid but not explosive. Most institutional players comfortable holding in this range while Western Haynesville story develops. Call seller positioning reflects this view.

📉 Bear Case (20% probability)

Target: $18-$23 (RETEST SUPPORT)

What could go wrong:
- 😰 Natural gas prices COLLAPSE below $3.00/MMBtu on warm winter, accelerating U.S. production, or LNG export delays
- 🚨 Western Haynesville disappoints - well performance degrades as delineation expands (sub-20 MMcf/d initial rates)
- ⏰ Q4 2025 earnings weak or 2026 guidance conservative - management signals capital discipline over growth
- 🇨🇳 Global recession reduces industrial natural gas demand and delays LNG export facility startups
- 💸 Broader energy sector selloff drags all natural gas producers lower
- 📊 Jerry Jones pursues going-private transaction at inadequate premium ($20-22 range), eliminating public equity upside
- 🤖 Haynesville basin hits inventory wall, forcing rig count reductions industry-wide
- 🔨 Break below $23 support triggers cascade toward August 2025 lows near $15-20

Critical support levels:
- 🛡️ $23: Major consolidation floor from October-November - MUST HOLD or momentum shifts bearish
- 🛡️ $20: Psychological round number and August recovery level - likely buying here
- 🛡️ $18: Year-to-date starting point - breakdown would erase entire 2025 gains

Probability assessment: Only 20% because natural gas fundamentals remain supportive (LNG exports growing 25% YoY), CRK has fortress balance sheet (net debt-to-EBITDA ~0x), and Western Haynesville offers legitimate upside optionality. However, as "swing producer" in Haynesville, CRK vulnerable to being first curtailed if prices weaken.

Call P&L in Bear Case:
- Stock at $20 on Nov 2026: Calls expire worthless, seller keeps full $11M (100% profit!)
- Stock at $18 on Nov 2026: Calls expire worthless, seller keeps full $11M, but stock position down -$7.95/share = -$302M loss on underlying (ouch!)
- Stock at $35 on Nov 2026: Calls worth $0 (at-the-money), seller keeps $11M, breakeven scenario

💡 Trading Ideas

🛡️ Conservative: Follow Smart Money - Sell Covered Calls

Play: If you own CRK stock, sell out-of-the-money covered calls to generate income

Why this works:
- 💰 Copy the institutional playbook - collect premium while maintaining stock exposure
- 📊 Stock trading in $23-26 consolidation range for weeks - perfect for covered call strategy
- ⏰ Natural gas prices already reflect strong winter expectations at $4.55 - limited near-term upside catalyst
- 🎯 Analyst consensus price target of $19.60 suggests stock trading ABOVE fair value at $25.95
- 🛡️ Premium income provides downside cushion if natural gas prices weaken

Recommended structure:
- 📈 Own 100+ shares of CRK at current levels ($25-26)
- 💵 Sell February 20 $28 calls (86 days to expiration)
- 💰 Collect ~$1.50-2.00 per share in premium (estimate based on 10% implied move and current vol)
- 🎯 Max profit: Keep premium + stock appreciation to $28 = ~$4-6/share total (15-23% in 3 months!)
- 📉 Downside protection: Premium reduces effective cost basis to $24-24.50

Entry timing:
- ✅ Enter NOW if you already own CRK stock
- ✅ If looking to initiate position, consider buying stock at $25-26 and immediately selling calls
- ❌ Skip if stock breaks above $27 (wait for pullback)

Risk level: Low (you own the stock anyway - just capping upside for income) | Skill level: Beginner-friendly

Expected outcome: Collect 6-8% income over 3 months while participating in moderate upside to $28. If CRK stays below $28, keep premium and repeat. If CRK rallies above $28, happily sell at 8% gain from current levels.

⚖️ Balanced: Bull Put Spread (Betting on Support Holding)

Play: Sell put spread targeting gamma support at $23-25 zone

Structure: Sell $24 puts, Buy $22 puts (January 16 expiration - 51 days)

Why this works:
- 📊 Defined risk spread ($2 wide = $200 max risk per spread)
- 🎯 Targets technical support zone at $23-24 where stock consolidated in October
- 💰 Natural gas fundamentals supportive - unlikely breakdown below $23 without major catalyst
- ⏰ 51 days captures Q4 earnings volatility and winter pricing action
- 🛡️ Selling premium at elevated 59% implied volatility

Estimated P&L (adjust based on current market prices):
- 💰 Collect ~$0.60-0.80 net credit per spread
- 📈 Max profit: $60-80 if CRK stays above $24 at January expiration (30-40% ROI)
- 📉 Max loss: $120-140 if CRK falls below $22 (defined and limited)
- 🎯 Breakeven: ~$23.20-23.40
- 📊 Probability of profit: ~60-65% based on implied move and technical support

Entry timing:
- ⏰ Enter after any spike above $26.50 for better entry prices
- 🎯 Target $0.70+ credit for risk/reward to be favorable
- ❌ Skip if CRK already below $24 (too close to short strike)

Position sizing: Risk only 3-5% of portfolio on this directional bet

Risk level: Moderate (defined risk, bullish bias) | Skill level: Intermediate

Management: Take profits at 50% of max gain ($30-40 credit) if achieved quickly. Cut losses if CRK breaks $23 support convincingly.

🚀 Aggressive: Long Call Spread (Betting on Breakout)

Play: Buy call spread betting on breakout above $26 resistance

Structure: Buy $27 calls, Sell $30 calls (February 20 expiration - 86 days)

Why this could work:
- 💥 Stock coiled at $26 resistance for weeks - breakout could trigger momentum to $30-32
- 🎰 Betting natural gas prices SURGE on cold winter weather or supply disruption
- 📊 Western Haynesville delineation results could provide positive surprise catalyst
- 🚀 Q4 earnings late February could show massive realized price improvement vs. Q3
- ⚡ Only need stock to reach $28-30 to profit meaningfully (8-16% rally)
- 📈 Call spread limits cost vs. buying outright calls

Why this could blow up (SERIOUS RISKS):
- 💸 DEBIT SPREAD: Costs ~$0.80-1.20 upfront ($80-120 per spread)
- ⏰ TIME DECAY: Theta burns -$2-3/day as expiration approaches if stock doesn't move
- 😱 RESISTANCE REAL: Stock struggling at $26 for good reason - could consolidate for months
- 📊 Natural Gas Volatility: Warm winter weather could send gas prices (and CRK) lower
- 🎢 Catalyst Needed: Stock won't break out on its own - needs fundamental driver
- ⚠️ Stock could stay $24-26 range and you lose entire debit

Estimated P&L:
- 💰 Cost: ~$0.80-1.20 per spread
- 📈 Max profit: $1.80-2.20 if CRK above $30 (150-180% ROI!)
- 🚀 Mid-range profit: $0.50-1.00 if CRK hits $28-29 (40-80% ROI)
- 📉 Total loss: Entire $0.80-1.20 debit if CRK below $27 at expiration (100% loss)

Breakeven points:
- 📈 Need CRK at ~$27.80-28.20 to breakeven (7-9% rally required)

CRITICAL WARNING - DO NOT attempt unless you:
- ✅ Believe natural gas prices will spike to $5+ in winter on weather catalyst
- ✅ Can afford to lose ENTIRE debit (real possibility!)
- ✅ Understand you're betting against consolidation continuation
- ✅ Have conviction Western Haynesville results will surprise positive
- ⏰ Plan to take profits at 50-75% max gain if achieved early (don't hold to expiration)

Risk level: HIGH (can lose 100% of debit) | Skill level: Intermediate to Advanced

Probability of profit: ~40-45% (lower than base case due to resistance and consolidation)

⚠️ Risk Factors

Don't get caught by these potential landmines:

  • 📉 Natural Gas Price Crash Risk: Stock 100% tied to natural gas commodity prices. If Henry Hub falls below $3.00/MMBtu on warm winter, oversupply, or demand destruction, CRK could easily drop 30-40% back toward $18-20 levels. Natural gas storage at 92% full (highest since 2016) limits upside price potential and creates downside vulnerability if weather disappoints.

  • 💸 Premium Valuation Vulnerable: Trading at EV/EBITDA of 13.21x vs. Oil & Gas industry median of 6.4x and worse than 80.72% of 773 industry companies. This is EXTREMELY stretched relative to peers. Stock is priced for PERFECT natural gas price execution and Western Haynesville success. Current price of $25.95 represents 32% premium to $19.60 average analyst price target. Any disappointment magnified by valuation compression.

  • 🎢 "Swing Producer" Vulnerability: Haynesville characterized as "swing production" basin due to dry gas focus and higher total costs vs. Marcellus/Permian. CRK will be FIRST curtailed when natural gas prices weaken due to deeper wells and higher drilling costs (~$12-15M per well vs. $8-10M in Marcellus). This creates asymmetric downside risk in commodity downturn.

  • 🏗️ Western Haynesville Geological Risk: The transformative Western Haynesville play remains under-delineated with well performance variability. Recent wells ranging from 28-40 MMcf/d initial production suggests inconsistent rock quality across the 518,000 net acre position. If broader delineation shows sub-25 MMcf/d wells, the "growth story" thesis crumbles and stock could re-rate 30% lower.

  • 🏈 Jerry Jones Control & Going-Private Risk: 71% ownership by Jones creates governance concerns and limits liquidity for public float. Analysts speculating on potential going-private transaction at inadequate premium. If Jones pursues take-private at $22-24 (near analyst consensus), public shareholders lose current upside and are forced to sell at discount to current $25.95 price.

  • ⏰ Q4 2025 Earnings Execution Risk: Expected late February 2026 results create binary event risk. While realized prices should improve meaningfully vs. Q3 ($2.99/Mcf), ANY disappointment in production, costs, or 2026 guidance could trigger -15-20% selloff given premium valuation. Historical precedent shows energy stocks can gap sharply on guidance misses even with solid current results.

  • 🌍 Macro Recession Headwind: If U.S./global economy weakens in 2026, industrial natural gas demand falls and LNG export growth stalls. At current valuation, CRK has ZERO recession protection. Enterprise IT and industrial production get cut first in downturn. Even if CRK executes well operationally, macro headwinds could force 40-50% correction to $13-15 range seen in mid-2024.

  • 📊 Hedging Limits Upside Participation: While hedges provide downside protection (Q3 2025 hedging gains of $26.4M represented meaningful revenue boost), they LIMIT upside capture in rising price environment. If natural gas spikes to $6.00/MMBtu, CRK won't realize full benefit due to hedged volumes. Unhedged competitors will outperform in strong commodity environment.

  • 🛢️ Haynesville Basin Inventory Depletion: Some operators could exhaust inventory by year-end, impacting rig count and production growth industry-wide. If basin-wide rig count falls from current ~60 rigs to 40-45, it signals economic stress and could pressure CRK's ability to maintain production growth even if company-specific economics remain solid.

  • 💰 Call Seller Position as Contrarian Signal: The $11M institutional call sale signals sophisticated players are CAPPING upside at $35 rather than staying fully long into potential natural gas super-cycle. When funds managing hundreds of millions sell calls at 34% above current price rather than holding for unlimited upside, it's a caution flag about conviction level.

🎯 The Bottom Line

Real talk: Someone just collected $11 MILLION selling calls on CRK after the stock rallied +38.5% YTD on doubling natural gas prices. This isn't bearish on the natural gas story - it's smart profit-taking by an institution that's made HUGE money accumulating CRK at $15-20 during the 2024 downturn and doesn't want to risk giving it back if prices moderate.

What this trade tells us:
- 🎯 Sophisticated player expects CRK to trade BELOW $35 through November 2026 (not necessarily bearish, just capping realistic upside)
- 💰 They're comfortable collecting $2.96/share in premium (11.4% of stock price!) to fund future purchases or reduce portfolio volatility
- ⚖️ The timing (with stock at $25.95 and natural gas futures at $4.55) shows they see winter rally largely priced in
- 📊 They structured at $35 strike (well above $19.60 analyst consensus) - comfortable missing gains above that level
- ⏰ November 2026 expiration captures entire winter 2025-2026, Q4 earnings, Shelby Trough closing, and Western Haynesville delineation updates

This is NOT a "sell everything" signal - it's a "take some chips off the table and generate income" signal.

If you own CRK:
- ✅ Consider selling covered calls at $28-30 strikes to generate 6-10% income while maintaining exposure
- 📊 You've already won big if you bought below $20! Up 30-38% YTD is EXCELLENT for an energy stock. Protecting profits makes sense.
- ⏰ Don't get greedy chasing every last dollar - natural gas at $4.55 already reflects strong fundamentals
- 🎯 If you believe in Western Haynesville long-term, keep core position but trim 25-30% on rallies above $27
- 🛡️ Consider selling Feb $28 calls to copy this trade's structure at smaller scale

If you're watching from sidelines:
- ⏰ Late February 2026 (Q4 earnings) is the next major catalyst - wait for that clarity before entering
- 🎯 Pullback to $23-24 would be EXCELLENT entry (8-11% off current) with gamma/technical support
- 📈 Looking for confirmation of: Realized gas prices above $3.25/Mcf, Western Haynesville wells averaging 30+ MMcf/d, Shelby Trough proceeds deployed to high-return drilling
- 🚀 Longer-term (12-24 months), Western Haynesville success and sustained $4+ natural gas are legitimate catalysts for $30-35+ if execution delivers
- ⚠️ Current valuation (EV/EBITDA 13.21x vs. 6.4x industry) requires perfect execution - one stumble and it's back to $18-20

If you're bearish:
- 🎯 Wait for breakdown below $23 support before initiating shorts - fighting +38% YTD momentum is risky
- 📊 First support at $25 (current), major support at $23 (Oct/Nov lows), deeper support at $20 (psychological)
- ⚠️ Bull put spreads ($24/$22) offer defined-risk way to bet on support holding while collecting premium
- 📉 Watch for natural gas breakdown below $4.00 - that's the trigger for cascade toward $20-22
- ⏰ Timing is EVERYTHING: Premature bearish positioning risks getting run over by winter squeeze

Mark your calendar - Key dates:
- 📅 December 2025 - Shelby Trough asset sale closing expected ($430M proceeds)
- 📅 December 19, 2025 - Triple Witch OPEX (±9.78% implied move = $22.20-27.54 range)
- 📅 January-March 2026 - Peak winter heating season (Henry Hub expected to average $4.25/MMBtu)
- 📅 Late February 2026 - Q4 2025 earnings release (critical for realized price visibility and 2026 guidance)
- 📅 Q2-Q3 2026 - Western Haynesville delineation results from expanded drilling program
- 📅 November 20, 2026 - Expiration of this $11M covered call trade

Final verdict: CRK's natural gas story remains COMPELLING - LNG exports growing 25% YoY, Western Haynesville potential, fortress balance sheet (net debt-to-EBITDA ~0x), and Jerry Jones' $1B+ conviction are all real. BUT, at 13.21x EV/EBITDA (vs. 6.4x industry median) after +38.5% YTD gain with natural gas at $4.55 already pricing strong winter, the risk/reward is NO LONGER heavily skewed to upside for new money. The $11M institutional covered call sale is a CLEAR signal: smart money is harvesting premium at elevated volatility rather than chasing the last 30% to analyst targets.

Be patient. Let winter season play out. Watch Q4 earnings for realized price clarity. Look for better entry at $23-24 on any consolidation. The LNG export boom will still be accelerating in 6 months, and you'll sleep better at night paying $23 instead of $26.

Natural gas is a marathon, not a sprint. Protect your capital. 💪

Disclaimer: Options trading involves substantial risk of loss and is not suitable for all investors. This analysis is for educational purposes only and not financial advice. Past performance doesn't guarantee future results. The 7,687x unusual score reflects this specific trade's size relative to recent CRK history - it does not imply the trade will be profitable or that you should follow it. Always do your own research and consider consulting a licensed financial advisor before trading. Natural gas prices are highly volatile with potential for 30-50% swings in either direction. The call seller may have complex portfolio hedging needs not applicable to retail traders. Western Haynesville is an emerging play with geological risk.

About Comstock Resources: Comstock Resources Inc is an independent natural gas producer operating exclusively in the Haynesville shale basin across North Louisiana and East Texas, with a market cap of $7.37 billion in the Crude Petroleum & Natural Gas industry.

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