Option Bulls Take Action Amid Petroleo Brasileiro SA Petrobras (PBR) Bounce

Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR) is moving higher on news it'll cut thousands of jobs

Mar 17, 2016 at 10:33 AM
facebook twitter linkedin


Brazil-based oil producer Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR) is up 8% at $5.54, on reports the company is planning to cut 15% of its workforce. This sudden upside move is good news for PBR option traders, who are positioned bullishly ahead of front-month options expiration tomorrow night. 

For instance, the stock's 10-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is 1.54, meaning call buying has been more popular than put buying recently. And today, call volume is running at almost four times the pace of puts. The now in-the-money March 5 and 5.50 calls have seen the most activity, as speculators may be closing out these positions amid today's positive price action. 

Meanwhile, short sellers may be breathing a sigh of relief. That's because short interest plummeted by almost 27% during the two most recent reporting periods. However, PBR's short-interest ratio still stands at an elevated 5.60. 

While the stock has enjoyed a recent bout of technical success ahead of next Monday afternoon's earnings report, outpacing the S&P 500 Index (SPX) by a whopping 60 percentage points in the past two months, analysts have remained bearish. Specifically, all eight brokerage firms that track Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR) say it's a "hold" or worse. 

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.

 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 

 


 


 
Special Offers from Schaeffer's Trading Partners