Post-Earnings Put Players Pounce on Popping Halliburton Company (HAL)

Halliburton Company (HAL) is nearly 4% higher in the wake of its earnings report

Apr 20, 2015 at 11:10 AM
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Similar to sector peer Schlumberger Limited (NYSE:SLB), Halliburton Company (NYSE:HAL) is notably higher in the wake of its earnings report. Specifically, the stock is up 3.9% at $48.73, after HAL reported better-than-expected first-quarter results, despite an "unprecedented decline" in North American drilling. In the equity's options pits, however, puts are trading at four times the average intraday pace, with a number of speculators rolling the dice on an end-of-week retreat.

Diving deeper, HAL's weekly 4/24 47- and 48.50-strike puts have garnered the most attention, with almost 9,800 contracts on the tape thus far. It seems safe to assume new positions are being purchased here, as traders bet on the security breaching the respective strikes by Friday's close, when the weekly series expires. Delta on the higher-strike put is docked at negative 0.49, suggesting a 49% chance of an in-the-money finish. Meanwhile, delta on the lower strike is perched at negative 0.20.

Today's accelerated put activity is just more of the same for the stock, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Echoing this put-skewed preference is HAL's Schaeffer's put/call open interest ratio (SOIR) of 1.03, which ranks in the 87th annual percentile. In other words, short-term speculators have been more put-heavy toward the equity just 13% of the time within the past year.

Technically speaking, HAL has been on the mend since hitting an annual low of $37.21 in mid-December, up 31%. What's more, today's post-earnings pop has Halliburton Company (NYSE:HAL) on pace to notch its first daily close north of its 160-day moving average since Sept. 30.

Daily Chart of HAL Since September 2014 With 160-Day Moving Average
 

 

 

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