Diamond Offshore (DO, news, chart, volatility) is up 38 cents to $104.72 and order flow is bullish Thursday. Options order flow is running four times the usual, with 11,000 DO calls and 1,500 puts trading on the day. Most of todays volume is in the January calls. At 10:20, with shares trading for $105.83, a block of 5,000 January 120s traded offerside for $5.60 and 5,000 of the 140s for $1.55. Both trades printed on the NYSE and, with volume exceeding open interest, today’s action appears to be opening of a bullish spread. If so, the strategist is paying a net debit of $4.05 and has the potential to make $15.95 if shares of the oil driller rally to $140 by January options expiration.
About the Author (Author Profile)
Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.