Interoil is rallying, and traders are using puts to ride the
optionMONSTER's Depth Charge monitoring program detected the sale
of 4,500 December 77.50 puts for $5.15 and the purchase of an equal
number of December 62.50 puts for $1.12. Equal-sized blocks traded
at the same time in the November 70 puts and the November 55s for
$0.18 and $0.05 respectively, but volume was below open interest in
It appears that the investor had previously sold a November 70/55
put credit spread, looking for the energy driller to remain above
$70 through expiration later this week. IOC rallied 20 percent to
$80.18 yesterday after quarterly revenue beat expectations, and the
trader rolled the position up to the December 77.50/62.50 spread.
The adjustment collects an additional $3.90 and keeps him or her in
the trade for an additional month. It also raised the bottom of the
expected range from $70 to $77.50.
Put credit spreads
let investors collect money if a certain price level is held. (See
section for other market-neutral strategies.)
Total option volume was 12 times greater than average in IOC during
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