Weatherford Options Traders Bet ‘All’s Well’ (WFT)
Weatherford International, Ltd. (NYSE: WFT) originally looked like it was going to be in serious trouble after its earnings debacle when the company said that investors could not rely on certain aspects of its accounting. When that news came about…
Weatherford International, Ltd. (NYSE: WFT) originally looked like it was going to be in serious trouble after its earnings debacle when the company said that investors could not rely on certain aspects of its accounting. When that news came about two weeks ago, shares fell from $17.79 to $15.36. The move seemed like an overreaction at the time, but anything tied to accounting irregularities is a red flag for too many investors these days.
Now shares have recovered the bulk of that big drop after a 3% gain to $17.00 on Friday. More importantly, there is a boat load of options trading activity in the March-2012 CALLS as you can see below. We have these vetted out by the strike price for the March 16 expiration date, as well as the volume in contracts, followed by the open interest:
$CALL Vol. OpInt
15.00 1,399 1,479
16.00 1,628 5,883
17.00 26,857 17,631
18.00 11,788 42,834
19.00 5,227 3,342
20.00 7,154 15,602
Options trading in the April Calls also looks a bit elevated, but the real action is in the current month. It would appear based on the tape that perhaps things were not as dire as the reaction indicated.
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Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.
