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DryShips Inc. (NASDAQ:DRYS) has been on fire over the past couple of sessions, thanks to a round of positive business developments, including a new contract to build an ultra-deepwater drillship. So far this morning, the stock has touched an annual high of $2.98, and is currently floating at $2.93 -- 5.9% higher than yesterday's close. Speaking of yesterday, DRYS experienced a surge in options-trading volume, as 31,000 total contracts crossed the tape, or three times the expected daily amount. Nearly 90% of the volume traded on the call side.
The most active option was the in-the-money September 2.50 call, which saw close to 4,900 contracts change hands -- nearly half of which occurred at the bid price, suggesting they were sold. In light of the fact that open interest fell considerably overnight, it's likely many of the traders sold their long calls to close ahead of options expiration, in order to lock in their gains.
It's possible that some of the aforementioned traders may have rolled up their bullish bets, as well. DryShips' September 3 call was another popular target, with 3,332 contracts swapping hands at a volume-weighted average price (VWAP) of $0.09. Roughly two-thirds of the calls crossed on the ask side, and open interest rose overnight, suggesting they were bought to open. In this case, the speculators will profit should the shares exceed $3.09 (strike price plus VWAP) by Sept. 20, when the near-the-money options expire.
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