More than 3,200 August 47 calls were bought in multiple blocks for about $1.20 versus previous positioning of 1,562 contracts, according to OptionMonster’s real-time tracking systems. There was also selling in the August 50 calls for $0.33, so some of yesterday’s trades were apparently part of a spread.
Buying calls locks in the amount investors must pay to buy shares, while selling calls sets the exit price. That’s a spread of $3, which cost traders about $0.87, translating into a profit of 245 percent if Baker Hughes closes at $50 or higher on expiration in less than a month.
Yesterday’s option volume in the name was seven times greater than its daily average.
—By CNBC Contributor Pete Najarian
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Options Trading School:
Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC’s “Fast Money” and co-founder of OptionMonster.com. Najarian owns Baker Hughes calls.