Cameron trader expects good earnings

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One investor apparently thinks that fear is running too high in Cameron before the oil-service company reports earnings.

optionMONSTER's tracking systems detected the sale of 3,000 February 52.50 puts for $1.35 to $1.50. Volume was almost 10 times open interest in the strike.

The trader is now obligated to buy shares if they drop below $52.50 in the next 2-1/2 weeks. Given the credit earned, the entry price would be closer to $51.

This put selling is probably tied to the release of fourth-quarter results tomorrow morning. If they're good, option premiums will fall and benefit the put seller. Such trades often occur before major news events when investors believe that the market is overpricing risk. (See our Education section)

CAM is trading at $53.60, up 0.75 percent today and more than 14 percent since mid-December.

The put activity pushed total option volume in the name to almost triple its daily average.



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.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: CAM

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