Nabors Industries has been holding long-term lows, and one large
buyer is positioning for a gradual rebound.
optionMONSTER's trade scanners detected the purchase of 5,000
January 2015 20 calls for $1.70 yesterday. The volume dwarfed the
strike's open interest of just 53 contracts at the beginning of the
day, so this is clearly a new position.
The calls lock in a $20 entry price in the stock in the next 25
months. Those options will increase in value if the shares rise,
potentially resulting in significant leverage relative to the
NBR rose 2.9 percent to $14.20 yesterday and has lost 18 percent of
its value so far in 2012. The energy driller has managed to stay
above its lows from earlier in the year, which could be leading
some traders to expect a rally in the belief that it's at support.
Yesterday's call buying dominated option activity the name, which
typically sees volume of fewer than 1,200 contracts per session.
Calls outnumbered puts by 5 to 1.
(A version of this post appeared on
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