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Options players set their sights on DryShips Inc. (NASDAQ:DRYS - 1.92) yesterday, with overall option volume ramping up to roughly six times the expected level. All told, a total of 9,243 calls and 936 puts changed hands on DRYS during the course of Thursday's session, with traders paying particular attention to the March series of options.
Specifically, the day's most active strike was the March 2 call, where 7,069 contracts were exchanged. Most of these calls traded near the ask price, suggesting they were purchased, and open interest at this strike surged overnight by 5,865 contracts. In other words, it looks like speculative players bought to open a new batch of calls on DRYS.
These back-month options were exchanged at a volume-weighted average price (VWAP) of $0.13, which means call buyers need DRYS to rally above breakeven at $2.13 (strike price plus VWAP) before March-dated options expire.
The stock is on the right track so far, adding about 11% to trade near $1.92 at last check. In fact, DRYS is currently on pace to collect a daily close above its 50-day moving average for the first time since Nov. 6. However, the shares still need to rise another 11% before Thursday's call buyers will begin to see profits.