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Jud Pyle looks at Weatherford, Patterson-UTI Energy, and Plains Exploration & Production.
Notable Options Volume in Weatherford (WFT), Patterson-UTI Energy (PTEN), and Plains Exploration (PXP)
June 29, 2009
Jud Pyle, CFA Chief Investment Strategist, www.ONN.tv
Monday’s "Sidewinders: Option Volume vs. Open Interest," shot on location at the Chicago Board Options Exchange (CBOE), covers interesting option trading in three stocks in the oil-and-gas space: Weatherford International Ltd. (WFT), Patterson-UTI Energy, Inc. (PTEN), and Plains Exploration & Production Company (PXP).
Weatherford International Ltd. (WFT)
Weatherford is seeing heavy call activity at its August 22.50 strike, where nearly 3,000 contracts have traded at $1.05 cents apiece, up 15 cents from Friday with the stock up 59 cents. Open interest coming into the session was 2,930, so we’ll wait until tomorrow to see if these were closing orders or not.
Weatherford News: Oilfield services are benefitting today from a research note at Morgan Stanley, which is drilling strength into the industry.
Patterson-UTI Energy, Inc. (PTEN)
The August 15 call strike has been popular today, with investors trading more than 3,400 calls. About 2,500 sold for 50 cents per contract; this option has already risen to 55 cents.
Patterson-UTI News: The oil-directed rig count increased by 23 units last week to 219, according to reports from Morgan Stanley. At 50% of recent peak, there should be continued room to run, thereby providing a potential positive surprise for PTEN shares.
Plains Exploration & Production Company (PXP)
The January 2010 20 puts have seen more than 3,000 contracts cross the tape today on open interest of 560. These went off at $1.75 per contract and were likely initiated by a buyer.
Plains Exploration News: While there is nothing company specific on the wires today, Morgan Stanley issued a report suggesting to expect April’s Energy Information Association report to show sequential growth in natural gas production when it is released tomorrow.
Summary: Sellers of gamma in WFT (front-dated options), call sellers in PTEN, and put buyer in PXP.
For more breaking developments in the options market, stay tuned in to www.ONN.tv. Thanks for watching!
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