Big Put Option Buys in Transocean (RIG) and Six Flags Entertainment (SIX)
Things are starting to look a little shaky around the markets, with some very notable put buying in the Dow Jones ETF (DIA), and the Spider ETF (SPY). We also just saw a very large put buy in Transocean Ltd (RIG) and Six Flags Entertainment (SIX).
A trader seems to think that Transocean Ltd (RIG)is going even lower, even after it’s fall from the $46 area in June. A trader bought 8,213 RIG Jan $34 puts. They paid $1.22 at the ask, for those puts that expire in January. That makes for a good sized bet with a transaction value of over $1,000,000.
Transocean Ltd (RIG) is currently trading at $37.69 down 36 cents on the day, well off its earlier high of the day of $38.87. RIG has a 52 week high of $55.74, and a low of $37.33 hit today for the year. It’s traded a well above normal volume today with almost 10 million shares trading by 2 pm today.
Transocean Ltd (RIG)announces quarterly earnings November 3rd so we know this put buy isn’t likely a play on leaked earnings. Could be that a downgrade and price target drop is in the wind. Wouldn’t be surprised to see that in the next day or so.
We like this trade given it’s size, and the market, and while we missed the real time trade, the puts are only asking $1.20 so you can get in a little cheaper than the smart money. We don’t like playing puts, but we’re interested in this one.
Meanwhile another trader seems to think that Six Flags Entertainment (SIX) is going lower as well. The trader bought 2,039 SIX December $30 puts. They paid 47 cents at the ask, for those puts that expire in December. That makes for a transaction value of almost $96,000.
Six Flags Entertainment (SIX) is currently trading at $34.87 down 44 cents on the day, though well off its earlier low of the day of $34.62. SIX has a 52 week high of $43.19, and a low of $31.86 for the year. It’s traded a well above normal volume today with 1.34 million shares trading by 2 pm ish today.
Six Flags Entertainment (SIX)announces quarterly earnings October 21 so it is possible that preliminary numbers could have leaked and it could very well have been a bad summer for Six Flags amusement parks. Or, it could be that a a large firm is about to drop the hammer on a downgrade.
Like RIG, we are not big on playing these Six Flags Entertainment (SIX) puts. Though that may change soon, as we move into the scary October timeframe.
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