Big Shorts in Oil and Gas Drillers (DO, RIG)

Post by:

Diamond Offshore Drilling, Inc (DO) is an oil and gas drilling contractor that operates offshore rigs. The company’s stock is currently trading around $44.00 in a 52 week range of $43.95-$73.19. The stock has been massively under-performing the market this year with shares falling nearly 22% year to date. Options action during today’s session suggests that traders believe this trend will continue through the rest of the year. Earlier in today’s trading session a trader bought 1,652 DO Jan 2015 36.25 puts for $1.61. In addition to this large put order in DO we have also seen massive put buying in Transocean Ltd. (RIG) which operates in the same sector as DO. With shares if DO hitting fresh 52 week lows in today’s session we believe the chart is indicating lower prices. With a bearish chart we believe that this order flow signals for a short opportunity in DO.

Trade: Buying the DO Jan 2015 36.25 for $1.70
Risk: $170 per 1 lot
Breakeven: $34.55

Andrew Keene
http://keeneonthemarket.com

Submit a Comment

Your email address will not be published. Required fields are marked *

VIP NOTIFICATION SERVICE

TIRED OF BEING THE LAST TO KNOW ABOUT THE LATEST WINNING TRADE?

Join our VIP Notification Service and Be Among The First To Know About All The Latest Trade Ideas, Trading Tips, Highly Profit Potential Trades, and Market Predictions From Our Team of Expert Traders!
Join Text Messaging List
By providing your mobile phone number and clicking on the above button, you agree to receive automated promotional messages from us. By opting into our SMS Program, you agree to our Terms and Conditions and Privacy Policy  
You have to agree on terms in order to proceed to the subscription.

• FREE VIP NOTIFICATIONS •

Get Our Free Daily Trading Videos

Delivered To your Inbox

By submitting your information you agree to our Terms of Service and our Privacy Policy