Big Prints in Halliburton Calls Ahead of Q3 Earnings

HAL – Halliburton Company – Shares of the oil equipment and services provider are down 1.65% in early afternoon trading to stand at $35.04 as of 12:35 p.m., but one bullish options trader populating the stock today prepared for shares to reverse course and hit new 52-week highs by November expiration. Halliburton’s shares rallied to a new 52-week high of $35.85 yesterday. According to news reports, the Houston, TX-based firm was awarded a contract by ExxonMobil to refurbish wells in the West Qurna field in southern Iraq. But, back to the options field, the optimistic individual signaled expectations of a strong rebound in Halliburton’s shares by purchasing a large block of approximately 20,000 call options outright at the November $38 strike for an average premium of $0.725 per contract. The bullish player stands ready to make money should HAL’s shares surge 10.5% over the current price of $35.04 to surpass the average breakeven point on the calls at $38.725 by expiration day next month. The large block of 20,000 call options exchanged at the November $38 strike is 3.875 times the volume represented by previously existing open interest of 5,161 contracts at that strike. HAL’s overall reading of options implied volatility jumped 12.7% to 40.94% this afternoon. The oil services firm reports third-quarter earnings ahead of the opening bell on October 18, 2010.

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.

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