Options Action Turns Negative as OSG Plummets

Shares of Overseas Shipholding Group (OSG) are continuing lower today, currently off 9.57% to $3.40. The stock fell 27.5% yesterday as liquidity concerns began to surface about the company.

Options action is highly negative today. In the first hour of trading, call volume has ramped to 11x normal volume with 71% of those trades being sales on the bid. The heaviest sales are coming in November, where the $3.00 strike has traded 6,059 times on open interest of only 40 contracts.

Additionally, put volume is currently running at 1.3x normal volume with 65% of all contracts traded being purchases on the offer.

Today action echoes yesterday’s. The most notable trades were the purchase of 840 January 2013 $3.00 puts, on the offer, for $0.90. Minutes later the trader bought an additional 1,990 Jan13 puts, on the offer, for $0.95.

Implied volatility is falling today, currently off 7.7% to 196.86%. 10-day realized vol is registering 162%.

Overseas Shipholding Group, Inc. is a tanker company engaged primarily in the ocean transportation of crude oil and petroleum products.

About Michael Zerinskas

Originally from Chicago, Michael J. Zerinskas began his career as an intern for a small high-frequency trading firm based at the CME; he then moved on to become Chief Options Strategist at Benzinga.com. Michael is now Unusual Activity Editor at The Options Insider, specializing in VIX, volatility, and flagging unusual activity.