Large play sees Anadarko topping out
Chris McKhann | [email protected]
The trade involved 10,000 each of the August 80 and 100 calls and the August 65 puts. The 80 calls were sold for the bid price of $6.6 while the 100 calls were bought for ask of $1.15. At the same time, the 65 puts were purchased for their ask price of $2.10. The volume was more than 6 times open interest at all three strikes, so this is clearly a new position.
The trader is using the sale of the call spread to offset the cost of the puts. The overall position takes in a credit of $3.35, which will be the profit if shares are between $80 and $65 at expiration in mid-August. (See our Education section)
APC rose 2.5 percent yesterday to finish the session at $79.49, its highest close since March as shares came off highs above $88 in February. The oil and natural-gas producer fell below $57 in June but has been climbing steadily since.
More than 89,000 APC options traded yesterday, 10 times its daily average in the last month.