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Option Brief: Halliburton Company (NYSE:HAL) is down 2.3% to $51.26 today, despite narrowly beating analysts' per-share, third-quarter earnings outlook this morning. Meanwhile, options are trading more rapidly than usual, with volume more than doubling the expected intraday amount. The majority of that volume has transpired on the call side, where roughly 29,000 contracts are on the tape, compared to 14,000 puts.
HAL's most active strike by a wide margin is the December 55 call, where more than 15,000 contracts have changed hands. Roughly two-thirds of this volume was executed as one block trade of 9,750 contracts, at the bid price of $0.58 each, suggesting they were sold. Open interest at the strike consists of just over 1,900 positions, too, indicating the creation of freshly minted neutral-to-bearish bets.
By writing the calls to open, today's big trader is banking on Halliburton -- which has tacked on about 48% year-to-date -- stalling shy of the strike price through back-month options expiration. If that scenario plays out, the speculator will retain the entire premium received. If, on the other hand, the shares topple the strike prior to expiration, the aforementioned individual may be assigned -- in which case, he could be forced to deliver the shares at $55 each, no matter how high they've ascended. It's worth noting that HAL has not traded above the strike since August 2011.
At last check, the stock's 30-day, at-the-money implied volatility was off 5.1 percentage points, or 17.6%, following the release of the company's earnings news. As a result, the premium received for selling Halliburton Company (NYSE:HAL) options is considerably less today than it was last Friday -- but there is also less of an "unknown" element surrounding the trade.
For a closer look at Halliburton Company (NYSE:HAL), visit our HAL quote page, which features links to recent commentary, charts, and sentiment indicators.