Golar LNG Limited (GLNG) Skyrockets, But Option Traders Want More

A long-term contract sparked a run on Golar LNG Limited (USA) (GLNG) call options

May 5, 2015 at 11:01 AM
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Natural gas carrier Golar LNG Limited (USA) (NASDAQ:GLNG) is the biggest percentage gainer on the Nasdaq thus far, up 26% at $47.45, as traders cheer the firm's 20-year contract with Ophir Energy. GLNG is now on pace to end atop its 200-day moving average for the first time since late November, and option traders are rolling the dice on even more upside for the shares.

GLNG has seen roughly 16,000 calls change hands already -- 38 times the average intraday clip, and eight times the number of puts traded. Buy-to-open action has been spotted at the June 50 call, with speculators paying a volume-weighted average price (VWAP) of $1.73. In other words, the buyers will begin to profit if GLNG topples $51.73 (strike plus VWAP) by the close on Friday, June 19, when back-month options expire. In light of GLNG's rally, delta on the call surged from zero to 0.42 overnight, suggesting a roughly 42% shot of the contract expiring in the money.

Even before today, though, calls were the options of choice among Golar LNG Limited (NASDAQ:GLNG) traders. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 50-day call/put volume ratio of 25.19 stands higher than 98% of all other readings from the past year.

 

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