Unusual Options Activity in Apache $APA - PowerPoint PPT Presentation

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Unusual Options Activity in Apache $APA

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Recently, there has been some unusual options activity in Apache $APA. – PowerPoint PPT presentation

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Title: Unusual Options Activity in Apache $APA


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Welcome to Options Trading Research Your premier
site for news and information on Profitable
Options Trading. For more info on Options Trading
visit our website www.OptionsTradingResearch.com
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  • Hi, My name is Steve and Im with Options Trading
    Research, today were reviewing our recently
    published article

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  • Unusual Options Activity In Apache APA

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  • As many of you know, unusual options activity can
    be a valuable indicator as to what traders are
    thinking, and more importantly, where these
    stocks are heading in the short-term.

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  • This is something professional options traders
    pay a lot of attention to, and for good reason
    Unusual options activity can tip off big moves
    in a stock, either up or down. So lets take a
    look at some interesting activity that caught
    our eye this week

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  • Apache APA is an independent energy company
    focused on fossil fuels. The company generates
    about 10 billion revenues primarily from oil and
    natural gas production. For a good description
    of the company, follow the link.

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  • APA is trading at 47.77, down 22 for the year.
    Thats 53 below the 52-week high, and 11 from
    the 52-week low.

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  • So what does unusual options activity in APA tell
    us?

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  • APA, like many oil and natural gas companies, has
    hit hard times over the past year. The
    precipitous drop in the price of crude oil has
    really taken its toll on fossil fuel production
    companies like Apache. In fact, the stock is
    down over 50 from this time last year.

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  • Despite the obvious pricing pressure in the oil
    and gas industry right now, APA still posted
    better than expected results for last quarter.
    The company is performing pretty well despite the
    circumstances.

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  • After all, theres only so much management can do
    when the price of oil has been getting hammered
    for so long.
  • Heres the deal

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  • This week, a trader sold a large block of puts on
    APA. Keep in mind, a put option makes money when
    the underlying stock goes down, so selling a put
    option benefits from a move in the opposite
    direction (or no movement at all).

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  • Specifically, a trader sold 25,000 October 47.50
    puts for 2.90. The total cash collected for
    this trade is roughly 7.3 million. Breakeven
    point for the trade is 44.60.

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  • Given the open interest, this trade is likely an
    opening position.
  • Heres the chart of APA

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  • APA has clearly been under pressure for the last
    year. The stock has struggled as the price of
    crude oil has continued to fall. The share price
    has been below the 50-day moving average for some
    time now, but it does appear to have ticked up in
    recent days.

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  • This trade suggests APA may have put in a bottom.
    The most recent earnings did shed some positive
    light on the company, despite headwinds from
    falling oil prices. Moreover, 7 million is a
    pretty big bet that the stock isnt going to drop
    below 45.

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  • Its even more aggressive considering theres
    virtually unlimited loss potential with this type
    of put selling strategy.

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  • More Options Trading Ideas

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  • Keep in mind, theres a lot more unusual options
    activity going on than what we discuss here. We
    just try to bring you what we feel are the most
    significant ones and the ones you might actually
    be able to make some money on!

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