Anadarko Petroleum (APC) investor expresses bearishness


Near-term put volume in Anadarko Petroleum Corp. (NYSE: APC ) suggests an investor expects significant downside during the next month. The August 39 puts were active during Friday's session thanks to heavy put buying.

At 10:25 a.m. EST, a block of 3,500 of these out-of-the-money (OTM) puts changed hands for $1.02 per contract, which was higher than the ask price at the time of the trade. The August 39 puts are home to current open interest of 1,000 contracts. It looks like this investor chose to commit a total of $357,000 to open this bearish position on APC. The most amount of money this put buyer can make is $37.98 per contract (the strike price minus the premium paid) in the unlikely event that APC shares are trading at zero at expiration. The investor will suffer a loss of $1.02 per contract, which is them most this trade can lose, if APC shares are still trading higher than the strike price. This long put trade calls for the stock to be trading at least 20% lower than its current level. This bearish play also calls for the stock to be trading slightly higher than its 52-week low of $34.54.

APC shares dropped more than 2%, or $1.07, to $48.01 during morning trading. The oil and gas company did not announce any notable news on Friday. APC is scheduled to announce earnings figures on Aug. 3 and analysts estimate earnings of 37 cents a share.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Options

Referenced Stocks: APC

Karla Yeh

Karla Yeh

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