McDermott International (MDR, news, chart, volatility) calls are being bought as the stock falls $4.30 to $11.26 and its lowest levels in three years. MDR is taking a beating after the company posted quarterly earnings of 37 cents per share, which missed analyst projections by 37 cents. The stock suffered several brokerage downgrades on the news. The action in the options market is interesting, as 11,000 calls and 2,000 puts have traded on the day. The January 15s are the most actives. More than 3,000 have traded, with nealry three-quarters traded on the offer. Open interest is 821 contracts, suggesting open call buying and perhaps based on the view that the sell off in the Houston Texas construction company is overdone.
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.