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Three-way strategy targets Petrobras

Chris McKhann (chris.mckhann@optionmonster.com)

A three-way combination trade today's option activity Petrobras as shares fall back toward lows.

optionMONSTER systems shows that a trader sold 9,950 June 15 calls for the bid price of $0.56 in volume below the previous open interest of 10,300. At the same time, he or she bought 9,950 July 15 calls for their ask price of $1 and sold the same number of the July 16 calls for $0.45. The volume at each of those strikes was well above the open interest, creating a new call spread .

So the trader is rolling out of the June in-the-money calls and opening the the July vertical spread. The July 15 calls were $0.46 in the money at the time of the trade, and with that the investor is taking $0.01 off the table in the roll. (See our Education section)

PBR is down 1.44 percent today at $15.41, which would be its lowest close since the 52-week low of $14.40 set in early March. Shares of the Brazilian oil and gas giant were just shy of resistance at $20 into the start of May.

Total option volume in PBR tops 47,000 contracts, more than triple its daily average in the last month.

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