Call Option Surges: Petroleo Brasileiro Petrobras (PBR) and Freeport-McMoRan Inc (FCX)
It was such a busy morning for unusually large call buys but unfortunately we were away from the office. While we have missed the boat on some, here’s a couple that haven’t taken off since their large call buys this morning in Petroleo Brasileiro Petrobras (PBR) and Freeport-McMoRan Inc (FCX).
In early trading this morning there was a large call buy in Petroleo Brasileiro Petrobras (PBR). A trader bought 3,000 September $21 calls just after the open today. Since then the stock has traded down some. So now you can actually pick up the same options as this “smart money” trader but for a little less change. These call options are still only 22 cents bid to 26 cents ask, with the last trade at 22 cents. This short term call bet was pretty small, but we have a soft spot for ADR call buys, especially latin based companies. Those good ole boys like their insider trading! The Sept 21’s have now traded over 5,000 contracts, while the October 21’s have also seen some opening action.
Petroleo Brasileiro Petrobras (PBR) is currently trading at $19.11 down 10 cents today, and trading down from it’s high earlier today of $19.48. PBR has a 52 week high of $19.48, and a low of just $10.20 on the year. It’s trading average volume with 16.5 Million shares trading by 1:30 pm today.
While this trade makes the options attractive since the pullback, we actually like the common with it’s almost 4% dividend yield. We’re playing this both ways.
The second interesting trade was earlier this morning in Freeport-McMoRan Inc (FCX). This one saw a big trade by one buyer of 9,000 October $37 calls in FCX just before 10:30 this morning for 48 cents. There have been over 10,300 traded now. Since that big buy, the stock has come up just a bit, but you can pick some up for a copy cat trade at the ask of 54 cents.
Freeport-McMoRan Inc (FCX) is currently trading at $36.02 down 42 cents, but well off it’s low of the day of $35.63. The 52 week high for FCX is 39.32. Freeport-McMoRan Inc (FCX) is scheduled to report earnings on October 21, 2014 though we doubt very much this call buy has anything to do with earnings given that these options expire on Oct 18.
We have to assume this has something to do with an analyst upgrade and or price target raise, some other material fact yet to be released to the public.
So given that some of the other call buys today have already skyrocketed, these two call buys in Freeport-McMoRan Inc (FCX) and Petroleo Brasileiro Petrobras (PBR) are a couple you can still get in on before they too set sail.
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