Bulls Dominate Cameron International Corporation (CAM) Options Pits

Cameron International Corporation (CAM) calls are trading at 19 times the average intraday pace

by Karee Venema

Published on Feb 2, 2015 at 2:24 PM
Updated on Apr 20, 2015 at 5:32 PM

Cameron International Corporation (NYSE:CAM) is higher this afternoon, as news of a decline in U.S. oil rigs overshadows a batch of mixed brokerage attention. At last check, the shares were up 1.1% at $45.27 -- and unlike fellow rebounding energy name Seadrill Ltd (NYSE:SDRL), options traders are gambling on more upside.

CAM calls are trading at 19 times what's typically seen at this point in the day, and are outpacing puts by a nearly 92-to-1 margin. Option bulls have set their sights the $47.50 mark, and appear to be buying to open contracts in the February- and March-dated series. By initiating these long positions, speculators expect the stock to be sitting north of the strike by the respective expirations.

Today's call-skewed session just echoes the withstanding bullish bias witnessed in CAM's options pits. For starters, the stock's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 5.66 ranks just 7 percentage points from a 52-week peak. Plus, CAM's Schaeffer's put/call open interest ratio (SOIR) of 0.24 is docked at an annual low, meaning short-term speculators are more call-heavy now than at any other point in the past year.

With such an upbeat attitude emanating from the options pits, it would seem as if CAM has been a technical standout -- only this isn't the case. In fact, since hitting a record peak of $74.89 in early September, CAM has surrendered more than 39% of its value. What's more, the shares hit a two-year low of $39.52 last Thursday, on the heels of a disappointing earnings report. Should Cameron International Corporation (NYSE:CAM) resume its downward trajectory, an unwinding of bullish bets could translate into a fresh wave of selling pressure.


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