Options Brief: Transocean (RIG)

RIG – Transocean Ltd. – Bearish traders rigged up pessimistic plays on Transocean Ltd. throughout the trading session with shares of the drilling services provider down as much as 10.4% to an intraday- and new 52-week low of $44.05 in morning trading. Currently Transocean shares are down 7.00% to stand at $45.73 as of 3:17 pm (ET). Near-term bears expecting RIG’s share price to continue to falter sold 5,400 calls at the June $50 strike for an average premium of $1.08 apiece. Call-sellers keep the premium received on the transaction as long as RIG’s shares trade below $50.00 through June expiration. More pessimistic players sold 3,500 now in-the-money calls at the June $45 strike at an average premium of $3.01 each. Investors short the June $45 strike calls walk away with the full premium pocketed today if shares of the underlying stock do not exceed $45.00 at expiration. Longer-term bearishness appeared at the August $40 strike where it looks like one investor purchased roughly 7,100 puts for an average premium of $3.19 per contract. RIG’s shares must decline at least 16.4% from the stock’s new 52-week low of $44.05 in order for the put buyer to garner profits beneath the effective breakeven price of $36.81 by August expiration day.