Options Trading News

November 4, 2011  Fri 11:55 AM CT

Petrobras is seeing unusual option activity in the second session this week, this time entirely in put selling.

Topping the action are the January 24 puts, which have traded more than 12,500 times against open interest of 5,149 contracts. All of the big institutional trades went for the bid price of $1.05, including blocks of 6,000, 3,000, 2,000, and 1,000.

This put selling is looking for PBR to stay above the $24 strike price through expiration. On Wednesday optionMONSTER's systems detected straddle selling in the Brazilian oil and natural-gas company. (See our Education section)

PBR trades at $27.18, down fractionally on the day. Shares have been trending up for the last month from a 52-week low of $20.76, but the gains have not made up the losses from August and September. The stock was above $35 in late July.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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