National Oilwell Varco sees puts surge
Chris McKhann | email@example.com
More than 15,000 NOV options have already changed hands today, about 3 times its daily average in the last month. optionMONSTER's systems show that most of the action was in one large put spread.
A trader bought 5,500 August 62.50 puts for the ask price of $1.02 under the open interest of 11,369 contracts. At the same time, he or she sold 5,500 November 62.50 puts for the bid price of $3.10 against open interest of 607 at that strike, so that trade is clearly a new position.
This could be a short calendar spread in the oilfield-services company, which would be designed to profit from an increase in volatility in the nearer term and a big move in shares away from that $62.50 strike price. It is also possible that the trader is rolling a position from August to November, setting a floor for the stock at that same level. (See our Education section)
NOV is down 0.6 percent to $68.19. Shares have again pulled back from resistance at $70 that has been in place since early May, when the stock came off a 52-week high above $87 set in late February. Shares bounced off support and 2012 lows around $60 at the end of June.