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Bulls Drill for Profits in Transocean

Pete Najarian
Thursday, 20 Dec 2012 | 5:51 AM ET
Oil rigs in the South China Sea.
Paul & Paveena McKenzie | Oxford Scientific | Getty Images
Oil rigs in the South China Sea.

Transocean is attracting upside option activity as the offshore driller tries to break out of a tight range.

More than 2,700 January 49 calls traded in a strong buying pattern yesterday, led by a print of 1,925 that went for $0.48, according to OptionMonster's real-time tracking systems. The volume was 6 times higher than the strike's open interest of 433 contracts at the beginning of the day, indicating that these are new purchases.

The calls, which lock in the price where traders can buy the stock, are looking for Transocean to gain roughly 7 percent by expiration on Jan. 18. The oil and gas exploration company is scheduled to report results for the fourth quarter and all of 2012 on Feb. 24.


Transocean shares were down fractionally yesterday to close at $46.41. Shares have been trapped between $45 and $50 since July, and they are now sitting just above their 50-day moving average.

Total option volume in the name was more than double its daily average in the last month. Calls outnumbered puts by more than 2.5 to 1.

—By CNBC Contributor Pete Najarian

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Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com. Najarian has no positions in RIG.

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