Options Trading News

October 29, 2013  Tue 4:14 AM CT

A long-term option play is bullish on energy driller Noble.

Just shy of 30,000 NE options changed hands yesterday, more than 6 times its daily average for the last month. The big trade came in the January 2015 calls.

A trader sold 5,400 of the 45 calls at that strike for $1.97 against open interest of 7,881, according to optionMONSTER's Heat Seeker system. At the same time, he or she bought 5,400 of the 40 calls for the ask price of $3.75 in volume above open interest of 1,655, so that is clearly a new position.

The trader could be opening a vertical spread, paying $1.78 for the chance to make up to $3.22. Alternatively, this could be an investor rolling a long-call position lower to get more upside exposure. (See our Education section)

NE gained 1.5 percent yesterday to close $38.65. The offshore oil-and-gas contractor was at resistance at $39.50 in mid-September but was down at support around $37 two weeks ago.
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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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