Anadarko Petroleum is pushing higher today, and a huge call spread is looking for more gains by early next year.
optionMONSTER's Heat Seeker system detected the purchase of 25,000 January 120 calls for $2.19 and the sale of 25,000 January 135 calls for $0.58, below the listed bid price at the time. The volume was more than 20 times the previous open interest in each strike, indicating new positioning.
This bullish call spread cost $1.61 to open, which is the amount at risk in the trade. The maximum gain of $13.39 would be realized with APC above $135 at expiration in mid-January 2015. The delta of the 135 calls suggests that there is 7 percent probability of that happening. (See our Education section)
APC is up 1.98 percent to $100.94 midday trading. That would be a new closing high for the stock, which shot to an all-time intraday high as $103.50 at the start of this month. Shares were below $85 three days before that.
The oil and gas company reports earnings on May 5, so today's option trader is apparently looking for good results from that as well. Today's call spread pushed the total option volume in APC above 73,000 contracts, almost triple its daily average for the last month.
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