Pre-earnings rally for Patterson UTI?
David Russell | email@example.com
optionMONSTER's Heat Seeker monitoring program detected the purchase of 2,500 July 21 calls for $0.375 and the sale of 1,500 July 20 calls for $0.875. Volume was below open interest at the lower strike, so it appears an existing position was closed and rolled higher.
The investor collected $37,500 making the adjustment, but maintained a net delta of about 1,000 because they increased the number of number of contracts owned. As a result, they will have a similar performance to the upside with less capital at risk. (See our Education Section for more on how to manage trades more effectively with options.)
PTEN is up 1.88 percent to $20.55 in afternoon trading. The stock climbed as high as $25.48 in March and is now attempting to rebound after retreating to its 200-day moving average.
Earnings have beaten expectations for at least the last year. The next quarterly report is scheduled for July 25--after today's calls expire--so the buyers are looking for shares to melt up into the announcement.
Total option volume is 7 times greater than average in the name, with calls outnumbering puts by 62 to 1.