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Options Trading News

January 24, 2013  Thu 3:47 AM CT

APC: SEE CHART GET CHAIN FIND STRATEGIES
One investor apparently thinks that Anadarko Petroleum is setting up for an historic breakout.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 7,500 August 85 calls for $4.45. An equal number of August 100 calls were sold at the same time for $1.09, resulting in a net cost of $3.36.

Known as a bullish call spread, the trade will leverage a move between two prices, in this case $85 and $100. The investor will recover all of the initial investment if APC closes at $88.36 on expiration and will double his or her money for every $3.36 it climbs up to $100. (See our Education section)

APC fell 0.88 percent to $78.79 but is up 18 percent in the last three months. The oil and natural-gas company, named after a geographical formation in Texas and Oklahoma, has never traded over $89. But, it's been steadily making higher lows for the last 20 years, and yesterday's trader is looking for a push up to triple digits.

More than 39,000 contracts changed hands in the session, according to the Heat Seeker. Calls outnumbered puts by a bullish 6-to-1 ratio.
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