Schaeffer's Options Center
Sponsored by:
Schaeffer's Daily Option Blog

Bears Pile On as Transocean LTD (RIG) Hits New Low

Put buyers expect Transocean LTD's negative technical momentum to continue

by 3/13/2014 2:06 PM
Stocks quoted in this article:

Option Brief: Transocean LTD (NYSE:RIG) options activity has gone through the roof today -- especially on the put side, where volume is roughly 15 times the intraday norm. As such, the stock's 30-day at-the-money implied volatility (IV) has jumped by 17.2% to 26.7%.

More than half of RIG's put volume has transpired at the May 37 strike, which has seen more than 29,500 contracts -- including a block of nearly 11,300 -- change hands on open interest of just 228 contracts. Also, IV at the strike is on the rise, and 66% of the volume has traded at the ask price. All told, it appears new bearish bets are being initiated -- a theory that Trade-Alert supports.

By purchasing the out-of-the-money (OOTM) puts, the speculators expect RIG to sink below $37 by the close on Friday, May 16, when the options expire. At last check, the shares were off 3.5% at $39.37, after earlier touching a fresh annual low of $39.14. Regardless of what happens, the most the put buyers have at stake is the initial cash outlay -- which they'll surrender in total if they're holding OOTM options at expiration.

Technically speaking, Transocean LTD (NYSE:RIG) has struggled considerably in 2014, shedding more than 20%. Since late December, in fact, the shares have been pressured lower by their descending 32-day moving average.


permalink

Featured Brokers
ADVERTISEMENT
Unusual Option Volume
Option Flow
ADVERTISEMENT
ADVERTISEMENT
Most Active Stocks
Most Active Option Strikes
Largest Open Interest

Partner Center

© 2014 Schaeffer's Investment Research, Inc. 5151 Pfeiffer Road, Suite 250, Cincinnati, Ohio 45242 Phone: (800) 448-2080 FAX: (513) 589-3810 Int'l Callers: (513) 589-3800 Email: service@sir-inc.com

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

Market Data provided by QuoteMedia.com | Data delayed 15-20 minutes unless otherwise indicated.