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August 7, 2013  Wed 2:45 AM CT

Weatherford is trading just shy of its 52-week high, and one trader apparently believes that any pullbacks will be minimal.

optionMONSTER's tracking systems detected the sale of 3,000 September 14 puts at the same second yesterday for $0.44. The volume was well above the strike's open interest of 1,107 contracts before the trade appeared, showing that this is clearly a new position.

This put seller will keep the $0.44 credit as profit if WFT remains above $14 through expiration in mid-September. If the stock falls below that strike price, the trader will be on the hook to buy shares at that level. (See our Education section)
 
WFT was down fractionally to $14.42 yesterday. The energy-drilling equipment and services provider spiked higher after reporting second-quarter results last Wednesday but is now bumping up against a resistance level at its highs that has been tested several times since May.
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Real vs. Synthetic

We now know that there are two ways of creating a call position, a put position, and a stock position. We can simply use the actual real security or we can recreate it synthetically. We can create these positions in both long and short forms and this ability sets up an interesting scenario--an arbitrage!

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