Range-bound play targets Noble

optionMONSTER

A short-term play sees limited movement for the next few days in offshore-drilling contractor Noble, which reported earnings last week.

More than 9,100 NE options have changed hands, more than triple its daily average in the last month. Topping the action is a combination in the weekly options expiring on Friday.

optionMONSTER systems show that a trader sold 2,400 each of the Weekly 38 calls and puts for $0.40 and $0.33 respectively. The previous open interest at each strike was below 500 contracts, so this is clearly new activity.

This short-straddle position takes in $0.73, which would be the profit with the stock around $38 at expiration. The implied volatility of the options is 23 percent, while the 10-day historical volatility is 14 percent. (See our Education section)

NE is up fractionally to $38.08 and is in the middle of its recent range. On a closing basis the stock has been in the profit range of today's trade since mid-September.


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