Maneesh Deshpande Recommends Selling Bearish Transocean Options and Buy BP Plc’s

Maneesh Deshpande, options strategist and head of U.S. equity derivatives strategy at Barclays Capital (BCS), recommends selling Transocean’s (RIG) January $45 puts and buying January $40 puts linked to ADRs of British energy giant BP plc (BP).

Bloomberg: “The options market seems to be pricing in a higher downside risk,” for [Switzerland-based Triton and Houston-based Transocean –the owner and operator of the Deepwater Horizon drilling rig leased to BP that exploded and sank last month in the Gulf of Mexico –] because the premium for its puts is high compared with calls while BP’s put premium is “cheap,” New York-based Deshpande wrote. “We recommend this trade to investors looking to express a bearish view on the impact of the accident.”

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