Earnings Wallop Whiting Petroleum Corp (WLL), Option Bulls

Whiting Petroleum Corp (WLL) is sinking on earnings, to the chagrin of bullish options traders

Jul 28, 2016 at 3:32 PM
facebook X logo linkedin

Whiting Petroleum Corp (NYSE:WLL) is reeling after the oil producer reported a bigger-than-expected quarterly loss. Specifically, the energy stock has dropped 7.3% to trade at $6.81 -- which should come as good news to short sellers, but could have bullish options traders kicking rocks.

Diving into the data, WLL shorts have definitely been on the prowl lately, with short interest jumping roughly 30% in the last two reporting periods. In fact, over one-fifth of the stock's total float is dedicated to short interest.

Options players have blazed a different trail, though. During the last 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open three times as many calls as puts. WLL's resultant call/put volume ratio of 2.90 ranks above 87% of all other readings from the past year.

That's not to say all these call buyers are bulls. In fact, some of the call buying may have been at the hands of short sellers hedging their bearish positions in the event of a post-earnings WLL rally -- one that obviously didn't materialize.

No matter the motive, now is a good time to buy premium on short-term options. The stock's Schaeffer's Volatility Index (SVI) of 99% ranks lower than 96% of all readings from the last year. In other words, volatility expectations are relatively muted right now. Plus, WLL's Schaeffer's Volatility Scorecard (SVS) of 94 suggests the stock has tended to make bigger moves than the options market has priced in over the prior year.

Speaking of the prior year, it's been a lousy one for Whiting Petroleum Corp (NYSE:WLL). Over the last 52 weeks, the oil stock has shed over 70% of its value, and in late February, it bottomed at an all-time low of $3.35.

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI