WFT – Weatherford International Ltd. – Shares of the provider of equipment and services used for the drilling, completion and production of oil and natural gas wells are up 1.35% to stand at $13.48 as of 2:05 pm (ET). WFT popped up on our ‘most active by options volume’ market scanner in afternoon trading due to bullish activity in the August contract. It looks like investor expecting Weatherford’s shares to continue to appreciate over the next couple of months are engaging in plain-vanilla call buying on the stock. Traders picked up roughly 4,200 in-the-money calls at the August $13 strike for an average premium of $1.48 apiece. Investors long the calls are prepared to profit should shares of the underlying stock rally another 7.4% over the current price to surpass the average breakeven point to the upside at $14.48 by August expiration. Bullish sentiment spread to the higher August $15 strike where investors paid an average premium of $0.56 per contract to take ownership of 3,400 call options. Optimistic individuals long the higher strike calls make money if WFT’s shares surge more than 15.4% to exceed the effective breakeven price of $15.56 by expiration day in August.
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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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