SDRL, BRCM Options – Unusual Trading Activity – November 17, 2014
This week we’re taking a look at unusual options trading activity in SeaDrill (SDRL) and Broadcom (BRCM).
As many of you know, unusual options volume can be a valuable indicator as to what traders are thinking, and more importantly, where these stocks are heading in the short-term.
This is something professional options traders pay a lot of attention to, and for good reason… Unusual options activity can “tip off” big moves in a stock, either up or down.
So let’s take a look at some ‘interesting’ activity that caught our eye this week:
SeaDrill (SDRL)
Like most drillers, SDRL has gotten crushed lately. However, the stock price may not be finished falling.
SDRL is currently trading for $20.74, down 45% for the year. The price is just 3% above the 52-week low of $20.20 and is 50% below the 52-week high of $41.84.
Today, the January 19 puts were bought for $1.40 while the January 16 puts were sold for $0.45. The bearish put vertical spread traded 7,000 times for a total cost of $0.95.
Drillers have gotten destroyed the past several months along with the decline in crude oil prices. Despite the huge drop already, this put vertical suggests SDRL could fall all the way to $16.
Broadcom (BRCM)
Semiconductor giant Broadcom could continue its recent run higher, according to options action.
BRCM is trading for $42.17. The shares are just 1% below the 52-week high of $42.48 and 64% above the 52-week low of $25.66.
Recently, more than 10,000 calls traded at the December 44 strike. The prices were between $0.48 and $0.55, and they’re all clearly new positions.
BRCM has climbed 44% this year and is just below its 52-week high. The bullish call action suggests the stock could set new highs and perhaps go even higher.
More Options Ideas…
That wraps up this week’s unusual options trading and volume…
Keep in mind, there’s a lot more unusual options activity going on than what we discuss here.
We just try to bring you what we feel are the most significant ones– and the ones you might actually be able to make some money on!
So keep an eye on your email inbox… we have a lot more options trading ideas coming your way!
Yours in Profit,
Gordon Lewis
Category: Unusual Options Trading Activity
