Call Demand Picks Up as Halliburton Company (HAL), Crude Head North

Halliburton Company (HAL) call activity is twice what's normally seen at this point in the day

Digital Content Group
Feb 3, 2015 at 11:03 AM
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Halliburton Company (NYSE:HAL) is up 3.8% today at $43.11, as it gets a lift from the recent rebound in crude prices, and BP plc's (ADR) (NYSE:BP) announcement that it will cut capital expenditure in 2015. As such, HAL calls are trading at twice the average intraday pace.

Data suggests buy-to-open activity is taking place at the February 43.50 call. By purchasing these options, the speculators are hoping for HAL to breach $43.50 by the close on Friday, Feb. 20, when front-month options expire.

From a wider perspective, call buying has been the predominant trend in the equity's options pits over the past several weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). HAL's 50-day call/put volume ratio across these exchanges is 2.32 -- higher than 70% of all similar readings from the past year. Simply stated, options traders have had a healthier-than-normal appetite for calls over puts of late.

Looking at the charts, HAL spent most of 2014 above $43.50, but dropped below the mark in late November as crude prices plummeted. In fact, the equity has underperformed the broader S&P 500 Index (SPX) by over 20 percentage points in the past three months.

Be that as it may, most of the brokerage bunch remains bullishly skewed toward Halliburton Company (NYSE:HAL). Eighteen analysts rate the shares a "buy" or better, versus seven giving them "hold" ratings, and only one "strong sell" recommendation.


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