Options Trading News

November 16, 2012  Fri 9:43 AM CT

Anadarko Petroleum has been trapped in a relatively tight range, and one trader sees that trend continuing for the oil and natural-gas company.

A trader sold more than 5,000 February 77.50 calls, topped by a single print of 3,500 going for $2.48, according to optionMONSTER's systems. The volume was 5 times the strike's open interest at the start of the session, so this is a new position.

The calls could have been sold in a straightforward bet that APC will remain below the $77.50 strike price for the coming months, or they could have been traded against long shares in a covered call position. But in either case the trader sees continued low volatility in the name.

APC is down 0.47 percent this morning to $70.05, trading in range between $65 and $75 that goes back to June. The 30-day historical volatility is down at 27 percent, at the low end of its range and down from 47 percent in late June.
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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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