RIG – Transocean, Ltd. – Shares in offshore contract drilling services provider, Transocean, Ltd., bucked the trend today and rose more than 5.5% at mid-session to secure an intraday high of $53.69 while hearings regarding the rig explosion of April 20 progressed before a government panel. A number of options investors initiated near-term bullish positions on the stock today, suggesting some are looking for the price of the underlying stock to rally higher ahead of September expiration. RIG’s shares are currently up 3.4% at $52.60 with 15 minutes remaining in the session. Traders purchased roughly 1,200 now in-the-money calls at the September $52.5 strike for an average premium of $2.27 a-pop. Investors long the September $52.5 strike calls make money as long as Transocean’s shares increase another 4.125% to trade above the average breakeven price of $54.77 by expiration day. The most popular strike for individuals seeking bullish stances was the September $55 strike where at least 2,400 calls were picked up at an average premium of $1.39 each. Call buyers at this strike are poised to profit should RIG’s shares jump 7.2% to exceed the effective breakeven point on the upside at $56.39. Finally, bulls scooped up nearly 2,000 calls at the higher September $57.5 strike by shelling out an average premium of $0.79 per contract. Approximately 1,000 calls were coveted at the September $60 strike where investors paid an average premium of $0.49 apiece. Options implied volatility on Transocean is up 5.8% to stand at 47.75% just 10 minutes before the close.
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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.
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