Investors are taking no risks as Weatherford International
hovers at a key level.
optionMONSTER's Depth Charge monitoring system detected the
purchase of more than 5,000 November 15 puts for $0.40 to $0.43.
Volume was almost double the previous open interest at the strike,
indicating that new positions were initiated.
These puts lock in the price where shares can be sold in the
oil-services company, providing holders with
insurance against a pullback
. The options can also be used to speculate on a drop without the
unlimited risk involved in shorting the stock. (See our
Weatherford's next quarterly report is tentatively scheduled for
Nov. 5 after the close, so the investor may want protection before
that event. The name also saw bullish call buying on
WFT rose 1.22 percent to $15.74 on Friday and is up 41 percent so
far this year. The company has been steadily advancing amid
improving sentiment in the energy sector and is forecast to enjoy
41 percent earnings growth in 2013. Analysts see that rate
accelerating to 57 percent rate next year.
Overall option volume was slightly above average in the name on
Friday, according to the Depth Charge. Puts accounted for
two-thirds of the total.
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.
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