Anadarko Petroleum jumped to its highest levels since March yesterday, but a large three-way trade is betting that the stock is topping out.
The trade involved 10,000 each of the August 80 and 100 calls and the August 65 puts. The 80 calls were sold for the bid price of $6.6 while the 100 calls were bought for ask of $1.15. At the same time, the 65 puts were purchased for their ask price of $2.10. The volume was more than 6 times open interest at all three strikes, so this is clearly a new position.
The trader is using the sale of the call spread to offset the cost of the puts. The overall position takes in a credit of $3.35, which will be the profit if shares are between $80 and $65 at expiration in mid-August. (See our Education section)
APC rose 2.5 percent yesterday to finish the session at $79.49, its highest close since March as shares came off highs above $88 in February. The oil and natural-gas producer fell below $57 in June but has been climbing steadily since.
More than 89,000 APC options traded yesterday, 10 times its daily average in the last month.
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