It’s been a busy day of unusual call buying and one of the more interesting ones today was seen in Apache Corporation (APA).
A trader was showing some serious confidence in Apache Corporation (APA) buying 3,169 of the Friday September 12 $106 call options. The trader paid $1.75 for the APA calls, for a total transaction value of $555,000.
The interesting thing about this large call buy is that Apache Corporation (APA) already announced earnings back on July 31, so this trader knows something else is going on here. The company did beat analyst estimates on those earnings, by one penny, earning $1.67 per share for the quarter.
So with earnings out of the equation, why did this trader make such a big bet on APA September $106 calls?
Looking at the analyst consensus, Apache Corporation (APA) is rated an “overweight” holding already, but the average price target is only $107.46. Even though it’s rated an overweight, 21 of the 35 analysts actually rate it a “HOLD”. That makes it interesting. This big call buyer could well be an analyst firm buying up these calls ahead of a ratings upgrade and price target increase. If so you can expect the news to come out sooner than later. We’d guess within the next week.
Another possible reason for the call buying could be related to Apache Corp pulling out of the Kitmat LNG project. It’s possible another deal could be announced instead of Kitmat. What that would look like we have no idea. But this call buyer does.
We’ll have to wait and see what unfolds in the near future for Apache Corporation (APA).