Is Anadarko heading for triple digits?
Someone apparently thinks that Anadarko Petroleum is headed to
triple digits for the first time ever.
optionMONSTER's Heat Seeker monitoring system detected the purchase of 2,750 August 90 calls for $4.65 and the sale of a matching number of August 105 calls for $1.05. The trade resulted in a net cost of $3.60.
This appears to be a bullish vertical spread , a position that will will inflate to $15 if APC closes at or above $105 on expiration. That would represent profit of more than 300 percent from a 20 percent move in the stock price. (See our Education section for more on how to generate leverage with options.)
Volume in the August 90s was below previous open interest, so it is also possible that today's investor may have closed an existing position and rolled it to the higher strike. In that case, he or she probably owns the shares and was using the options as part of a covered call strategy. The move would raise by $15 the level at which they must unload their stock.
APC is off 0.03 percent to $86.57 in morning trading but is up 19 percent in the last six months. That's roughly twice the performance of the broader energy sector in the same period.
Almost 28,000 contracts have changed hands in the Texas-based company so far in the session, already more than twice its full-day average. Puts account for barely one-third of that total, which reflects the bullish bias.