One of our favorite types of unusual options buys are those in foreign based companies. So of course we were very intrigued when we saw some unusual call buying action in little known Teekay Corp (TK).
A trader seems to think that Teekay Corp (TK) has some room to move higher. The trader bought 2387 TK October $55 calls. They paid just $2.20 at the ask, for those calls that expire in October That makes for a good sized bet with a transaction value of over $525,000.
Teekay Corp (TK) is currently trading at $54.41 down 46 cents on the day, though it is well off it’s low of the day of $46.63. TK has a 52 week high of $62.77, and a low of $37.20 on the year. It’s trading a little higher than normal volume with over 403,000 shares trading by 2:40 pm today.
Teekay Corp (TK)announced quarterly earnings this morning, August 7, before the open so at least this isn’t an earnings play. Someone seems to know this sell off this morning was way over done.
So what does this trader know that no one else seems to know? May be some new guidance coming or other material news is “anticipated” to be released, such as an upgrade.
We like this trade given it’s size, and the foreign based headquarters, and while we missed the real time trade, the calls are still only asking $2.25 so only 5 cents more than the smart money paid. Given that price, we are now locked and loaded and hope this trader knows his *hit!
Eleven analysts currently follow Teekay Corp (TK). The average rating on TK is “overweight” and the average price target is $59.01. Analysts expected a loss of 21 cents this quarter and it’s actual was 31cents. The last analyst action was August 6, when RBC Capital reiterated it’s Outperfrom rating and raised their price target from $72.00 to $80.00.
We like this unusual call buy on weakness in Teekay Corp (TK) and are ready to profit on whatever news comes.