It’s been a very busy morning of put buying by the smart money crowd. However, we’ve noticed a few interesting call buys mixed in with those put trades. And when there is a lot of put activity, these unusual call buys are all the more interesting, indeed. Three notable call buys were seen in TECO Energy Inc (TE),Colgate Palmolive Company (CL) and in Goodrich Petroleum Corp (GDP).
The first call buy, is a very interesting one, seen in the call options in TECO Energy Inc (TE). One wily trader bought 1,054 February $17.50 calls, paying just $0.50 at the ask, for the contracts. But other buyers rushed in on this one since that initial trade, and now there’s been a total of 3900 contracts traded. Those options are now bid 55 cents, and ask is 60 cents. I noticed a little nibbling in the May $20 as well.
TECO Energy Inc (TE) is currently trading at $17.39 down 12 cents on the day. The stock is actually coming well off it’s high since the call buying. TE has a 52 week high of $18.53, and a low of $16.12 for the year, which could possibly be the narrowest trading range we’ve ever seen.
TECO Energy Inc (TE)just saw some analyst action last week with Zacks and SunTrust reiterating their ratings of Neutral. Given the unusual nature of this call buy, I’d guess that another analyst firm is about to upgrade/target price boost this bad boy. We’ll guess Citi or Deutsche Group is pending.
Meanwhile Colgate Palmolive Company (CL) saw strange action in it’s weekly calls today. A trader bought 1,000 of the CL October 3rd $67.00 calls at the ask of $0.18. A rather strange buy on a down day in the markets.
Colgate Palmolive Company (CL) is currently trading at $65.76 up 48 cents on the day, though well off its earlier lows. CL has a 52 week high of $70.11, and a low of $58.72 for the year. It’s traded just 1 million shares today so far, currently on track for lower than average daily volume, which is 3.21 million shares.
Colgate Palmolive Company (CL) hasn’t seen any analyst action in the past month and a bit, so this could be a nod to an upgrade about to hit the newswires. No ideas or guesses on who that could be.
The third unusual call buy was in Goodrich Petroleum Corp (GDP) and that one was very unusual. A trader snapped up 2,000 of the March $20 calls in GDP this morning. The trader paid $2.00, all at the ask, for this opening trade. It also looks like a big spread call spread in the December $20’s and $25’s went through this morning as well. Something is clearly up with Goodrich Petroleum Corp (GDP), and these call buyers are the only ones who know what that is. If we were to venture a guess, it could have something to do with it’s upcoming energy conference schedule, an earnings leak, or, just the usual pre buying by an analyst about to upgrade the stock. It’s hard to imagine an upgrade though, as the analysts are already so out to lunch on this stock, with an average price target of $33.25 and a Buy rating.
What’s really interesting is the fact that the call buying happened while Goodrich Petroleum Corp (GDP) shares are very weak. Goodrich Petroleum Corp (GDP) is currently trading at $15.62, down $1.35 so far today, though it looks to have bottomed out here at around noon.
We like this one a lot, so we’ll be nibbling here.