"Saw a BIG buy of march 80 calls earlier at 91 cents."
Thanks for showing up Kenny. Try reading the thread next time. You missed the fact the same trader spent 20x the call amount on 80 puts.
Sentiment: Strong Sell
1,150 March 80 calls have traded, but you ignore the matching 1,150 March 80 puts that have traded also.
My interpretation of this trade is that it's a hedge by someone who owns the stock, would be glad to sell at $80 (writing covered calls), and is worried about the stock getting killed in the next 2 months so bought the 80 puts. The reason he/she would buy the 80 puts is they are very high delta (delta of -.85 so not much of the value is driven by expensive volatility).
I view this trade as quite bearish, although one can never know for sure - this is just a trade by a market participant.
Sentiment: Strong Sell
Bonk, I think the calls were bought, not sold, and the puts were sold, not bought. I conclude this from their price and the bid-ask prices at the time. If at or very close to the ask I assume it's a buy, if at or very close to the bid I assume it's a sale. Do you think that assumption is reasonable? Wouldn't that be a bullish trade--though as you say, one can never know for sure.
Those Mar 80 puts were sold at $20.66 .The ask is well over $21.00 No way they were bought.Most would thinks thats wildly bullish coupled with a call buy Mar 80 calls at 91 cents. Worst case own IOC at $@60 in March. Not a bad trade at all without news.With news prints money.
Bonkie knows Eric is short March 80 call from his posts here. So their boss is making a bearish bet. LOL to them.
Ya see its time for IOC to deliver.
Always tough to discern what the option strategy is by looking at the tape. There was a block of 100K shares so it looks like the trade may have been delta neutral and someone is capitalizing on the low volatility (relative) and hedging the delta. Looks like a vol trade rather than a directional trade to me. Someone expects volatility to really pick up without making an outright directional call.
Of course you'd find a way to paint a negative interpretation of the trade, but it could be bullish as well. I think the vol will start to spike from depressed levels and a significant short squeeze will ensue. There's a 40% borrow rate, almost no shares available to borrow, and depressed vol; I don't think this complacency amongst shorts can last much longer.
I'm watching other stocks with similar short interest dynamics across the market soar on marginal news, and I'm in awe that InterOil's cynics are all in right now.
Sentiment: Strong Buy