Options Intelligence Report: Moody's Corp. (MCO) & Anadarko Petroleum Corp. (APC)
MCO ñ Moodyís Corp.
Options implied volatility rose at the rating agency today following the dismissal of a lawsuit that gets Moodyís and fellow agencies off the hook for losses incurred by investors in mortgage backed securities. Moodyís sharesí rose to a six-month high at $29.18 before easing to $28.63, still leaving it with a lunchtime gain of 7.5% for the session. Volatility surrounding its options rose by about 10% to 44% as investors tried to figure out where its share price might go next.
Options trading was mixed although it appears that in-the-money call volume at the February $27 strike might be the work of a seller closing an established position. The volume of calls traded at that strike surpassed 2,000 lots where the premium stood at $2.30 and 142% higher than yesterday. Call buyers expressing greater ambitions for Moodyís prospects established fresh bullish positions at the same expiration contract at the $30 strike price. Put volume was not absent, however, with notable volume at both February and March $28 strike puts along with volume of around 1,300 lots at the February $26 strike where the number of contracts exceeded an open interest reading of just above 1,000 lots.
APC ñ Anadarko Petroleum Corp.
Bloomberg reported earlier that Anadarko Petroleum, ìdeclared a major oil discovery [Ö] in the Gulf of Mexicoî, which likely spurred the 1.25% rally in shares of the Texas-based firm to $64.71. APCís shares opened the session higher at $65.94 on the news. Option traders reacted by purchasing 2,500 put options at the March $60 strike for a premium of $1.74 apiece.
Put buyers are likely long the stock and securing downside protection to lock in recent gains in the underlying. Alternatively, put purchasers may hold no stock position. In such a case they are merely initiating bearish bets that the stock is set to fall sharply ahead of expiration in March.
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