Today’s tickers: PBR, PLX & XLF
PBR - Petrobras SA – Options on Petrobras are more active than usual this morning, with shares in the state-run Brazilian oil producer down more than 7.0% on the day to stand at a new 52-week low of $16.74 as of 10:45 a.m. ET. The stock dropped after the company reported fourth-quarter EBITDA that declined in the period, missing analyst expectations, and said it will lower dividend payments to shareholders. Trading traffic in PBR options is mixed, as some traders position for shares to weaken further, while others bet on a near-term rebound in the price of the underlying. Fresh interest in weekly puts is greatest at the Feb. 08 ’13 $16.5 strike where upwards of 4,100 lots have changed hands against one contract in open interest. Time and sales data suggests most of the puts were purchased at an average premium of $0.22 apiece, thus positioning buyers to profit at expiration this week should PBR’s shares settle below the average breakeven price of $16.28. The Feb. 08 ’13 $17 strike puts are also in play, with around 2,000 in-the-money puts purchased in the early going for an average premium of $0.45 each. Meanwhile, weekly call buyers snapping up Feb. 08 ’13 $17 and $17.5 strike calls at average premiums of $0.15 and $0.05 each, respectively, may profit at expiration in the event that Petrobras shares rebound by the end of the week. Similar strategies appear to be in play across the Feb. 15 ’13 expiration call and put options, as well as in the March expiry options contracts. Traders bracing for shares to move sharply lower paid an average premium of $0.09 per contract to buy around 380 of the Mar. $14 strike puts. These contracts make money if shares in the oil producer plunge 17% from the current price of $16.74 to trade south of $13.91 by March expiration.
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