Nabors Industries has been falling hard, and investors are braving the drop.
optionMONSTER's Heat Seeker tracking system detected the purchase of 5,000 July 26 calls for $0.88 and the sale of an equal number of July 30 calls for $0.15, resulting in a debit of $0.73. This bullish call spread will earn a maximum profit of 448 percent if NBR closes at or above $30 on expiration. (See our Education section)
NBR fell 4.29 percent to $25.01 yesterday. The contract-drilling company has lost 22 percent of its value since late April, following weakness in the broader energy sector.
Profit and revenue missed forecasts the last time it published earnings on April 26, aggravated by bad weather and disruptions in the Middle East. Management, however, predicted "significantly improving results" in the second half.
Investors also bought the July 26 calls apart from the bullish spread, pushing volume in the strike to 9,982 contracts.
Overall option activity in NBR was more than triple the daily average, with calls outnumbering puts by more than 8 to 1.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.