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September 23, 2016  Fri 6:45 AM CT

RIG: SEE CHART GET CHAIN FIND STRATEGIES

Traders are betting on a rebound in Transocean in the first half of next year.

optionMONSTER's monitoring system detected the purchase of 10,000 May 15 calls for $0.31 yesterday. There was no open interest in the strike before the trades appeared, showing that these are new positions.

Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)

RIG rose 5.58 percent to $9.65 yesterday but is down 20 percent in the last three months. The offshore energy driller is expected to release earnings results after the close on Nov. 2.

Overall option volume in RIG was twice its daily average yesterday. Calls outnumbered puts by a bullish 3-to-1 ratio.

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