Apache reports earnings next week, and one large trader is looking for the energy company to make a sharp move higher or lower by summer.
optionMONSTER systems show that a block of 5,000 June 85 puts traded for $1.88. The volume topped the previous open interest at that strike, so it is a new position, and matched APA's total daily average turnover for the last month.
Less than a minute later the largest block of Apache stock traded as 200,000 shares were bought for $86.58. The combination of stock and puts creates an overall strategy that is delta-neutral , meaning that the trader is looking for a big move up or down and/or for volatility to be greater than that implied by the options' premium. (See our Education section)
APA is up 0.35 percent to $87.11 in midday trading. The stock climbed to $88.68 yesterday, its highest intraday price since early December. Shares have been trending higher in the last six weeks from support around $78.
The natural-gas and crude-oil producer is scheduled to announce quarterly results on the morning of May 8, about six weeks before the June options expire.
More From optionMONSTER
- Investment & Company Information