Friday, March 25, 2011

Friday Options Brief: RIG, S, EK & TDC

Andrew Wilkinson submits:

Transocean Ltd. (RIG) ? Activity in near-term put options on the provider of offshore drilling services suggests some investors expect shares in Transocean to head further South in the next few weeks. RIG?s shares are currently down 2.00% to stand at $78.67 in early-afternoon trade. The stock is down 8.5% off its 11-month high of $85.98 set on March 3, 2011. Investors piled into put options in the front month, scooping up the contracts at deep out-of-the-money strike prices as low as the April $65 strike. Bearish players purchased around 1,400 of the April $80 strike put options at an average premium of $3.11 each.

Put buying spread to the lower April $75 strike, the most heavily trafficked strike thus far in the session, to secure 2,800 puts for an average premium of $1.26 a pop. More than 4,000 puts changed hands at the April $70 strike on paltry previously-existing


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