Options Brief: Noble Corp. (NE)

NE – Noble Corp. – Options investors established bullish positions on the provider of offshore contract drilling services this morning despite the 6.35% decline in the price of the underlying shares to $28.16. Noble’s shares fell sharply following President Barack Obama’s announcement on Thursday there is to be a six month moratorium on new offshore drilling. Contrarian players took advantage of richer put premium available today by selling short roughly 2,700 put options at the December $22.5 strike to take in an average premium of $1.475 per contract. Put sellers keep the full premium received as long as Noble’s shares exceed $22.50 through expiration day in December. Investors short the puts are apparently happy to have shares of the underlying stock put to them at an average price of $21.025 apiece should the put options land in-the-money at expiration. Shares must plummet 20% from the current price of $28.16 to dip beneath the $22.50 strike price, and must decline roughly 25.33% from the current price before put sellers face losses beneath the breakeven price of $21.025.

About Andrew Wilkinson 1023 Articles

Affiliation: Interactive Brokers

Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.

Interactive Brokers: Interactive Brokers offers direct market access to around 80 electronic global markets from a single account. Successful traders and investors understand that superior technology and lower trading costs can result in greater returns. For 32 years we have been building direct access trading technology that delivers real advantages to professionals worldwide. With consolidated equity capital of US $4.4 billion, IB and its affiliates exceed 1,000,000 trades per day. In addition, our prudent and conservative risk policies make Interactive Brokers a safe haven for your money. Discover some of the reasons why IB, the largest independent US broker/dealer, is the professional traders' and investors' choice.

Visit: Interactive Brokers

Be the first to comment

Leave a Reply

Your email address will not be published.


*