After a nasty week last week in the markets, the unusual options buys are coming back this Monday morning. We are seeing some large put buys which we’ll get to later, but one of the more interesting large call buys was in Chicago Bridge & Iron Company N.V (CBI).
A trader bought 3,154 October $65 calls in CBI this morning, mostly at the mid and ask price, starting as low as $1.35 and up to $1.59. This makes the bet worth somewhere in the area of $400,000. This is an interesting trade due to it’s size in this relatively thinly traded stock.
The good news is this is not an earnings play, as Chicago Bridge & Iron Company N.V (CBI) already reported earnings on July 24, 2014. So it’s more likely that this trade is a play on either some kind of surprise corporate announcement or more likely due to a rating upgrades and or price target increase.
Chicago Bridge & Iron Company N.V (CBI) is currently rated an “overweight” with a price target of $87.41. Looking at these ratings and price targets, it’s hard to imagine a firm coming out with a higher price target, given that CBI is currently only trading at $59.66, up 43 cents today.
We got to think there is something else coming down the newswire soon. We don’t know what, but the trader does, and he clearly likes it. So we’re jumping in on this bandwagon, it’s got some room to run and plenty of time until expiration on October 18th.
Chicago Bridge & Iron Company N.V (CBI) has traded as high as $89.22 this past year, and as low as $57.73. It looks ripe for take off any time now.
Good luck in your trading this fine Monday morning.