PDE – Pride International, Inc. – Bullish options traders positioning for shares of the international provider of offshore contract drilling services to rally are picking up call options in the January 2011 contract this morning. Pride’s shares are currently up 2.75% at $28.38 as of 11:30 am ET. Shares may have been helped higher by reports at the end of last week regarding the likelihood that the drilling moratorium will end sooner than the planned November 30 expiration date. Additionally, Credit Suisse analysts speculated on Friday that Pride International could be an attractive acquisition target for Seadrill, which sent PDE shares sharply higher on the final day of trading last week. Investors looking for the oil services firm’s shares to extend gains picked up approximately 2,500 calls at the January 2011 $29 strike for an average premium of $2.17 apiece. Call buyers make money if the price of the underlying stock surges 9.8% over today’s high of $28.38 to surpass the average breakeven price of $31.17 by expiration day next year. Options implied volatility on Pride International is up 3.5% at 41.25% just before 11:40 am ET.
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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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