Options Trading News

February 15, 2013  Fri 9:48 AM CT

As Transocean gives up gains from yesterday, one trader is looking for the offshore oil and gas driller to make a sharp move higher or lower in coming months.

optionMONSTER systems detected the sale of 5,000 May 62.50 calls for $1.15 this morning. The volume was more than 4 times higher than the strike's open interest of 1,132 before trading began today, clearly showing that this is a new position.

A large block of RIG stock traded less than a minute later as 150,000 changed hands for $56.5333. The combination of stock and options could create a delta-neutral strategy that is focused on changes in volatility, profiting from a big move in either direction. (See our Education section)

RIG is down 5.03 percent to $56.31 this morning after climbing to $59.50 yesterday, a 52-week high. Shares were below $44 at the end of 2012.
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The art of trading

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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