OptionsHouse

Options Trading News

May 28, 2013  Tue 3:47 AM CT

RIG: SEE CHART GET CHAIN FIND STRATEGIES
Transocean has been trapped in a range all year, but one trader is betting that the stock will go higher.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 5,000 June 50 calls for $1.97 and the sale of an equal number of June 55 calls for $0.27. Volume was below open interest in the 55s, so there are two possible explanations for the trade.

One is that the had investor previously owned those contracts and is rolling a long-call position to the lower strike, reflecting the drop in the oil-servicing stock. The adjustment cost $1.70 and keeps the calls in a close correlation to the stock price because it increased their delta. (See our Education section)

Alternatively, both halves of the trade may have been done to open new positions. In that case, it is a bullish call spread, also done for a cost of $1.70. The position controls the $5 spread between the two strike prices, translating into a profit of 194 percent on a move to $55.

RIG finished Friday up 0.19 percent to $52.06 and has been snaking in a range for months. Total option volume was more than twice the daily average, with calls outnumbering puts by 8 to 1.
Share this article with your friends


Related Stories

RIG

Calls give Transocean more time to rally

September 23, 2016

The offshore energy driller has plunged 20 percent in the last three months, but traders are betting on a rebound in the first half of next year.

RIG

Trade bets on halt to Transocean slide

September 14, 2016

The offshore energy driller has fallen 11 percent in the last three months, but one trader apparently believes that further declines will be limited.

RIG

Trade sees end to slide in Transocean

September 9, 2016

The offshore energy driller has dropped 9 percent in the last three months, but one trader apparently believes that further downside will be limited.

RIG

Short-term bulls pile into Transocean

September 8, 2016

Weekly call buyers are looking for quick gains in the offshore energy driller, which is down 14 percent in the last three months.

OptionsHouse

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Education & Strategy

Continue to melt up? Think debit call spreads

The U.S. equities market is continuing to melt up. Even though the labor market is stagnant, the Fed keeps hinting that a short term interest rate hike is coming sometime soon.

View more education articles »