Bet in surge of call buying.
There was a 25-fold surge in volume from 111 contracts to over 2,800 on the November 15th 2019 $16.50 call options on Petroleo Brasileiro (PBR), also known as Petrobras.
The options, with shares of the Brazilian oil company trading at $15.50, would trade in-the-money with a $1 rally in shares in the next 22 days. At a cost of just $0.19, or $19 per contract, it’s a cheap bet on shares to rally in the next few weeks.
- Crash Warning: Everything just changed
After 18 months of near vertical gains…the greatest bull run in history is starting to falter. And while some experts are urging investors to "buy the dip"…others are warning that the worst crash in financial history is straight ahead. Who's right…who's wrong? And more importantly, what should you do with your money right now to get ready?
The answer could save you potentially hundreds of thousands of dollars in the coming weeks.
Make no mistake, a major market shift is already underway... and this is the exact day it's going to hit U.S. stocks.
The news comes as workers at the company state that they will go n strike over the weekend. The company has also faced a variety of scandals and stood at the center of the country’s political corruption over the past few years.
With shares of the volatile oil company trading as high as $18 in the past year (which would put the $16.50 calls at $1.50 in value at expiration), this is one company where anything can happen.
Action to take: The company looks overvalued relative to all its oil assets, but given the political issues swirling around, it’s probably close to fairly valued right now. Investors can buy shares under $14.50 on a pullback.
With oil prices trending higher the past few days, and with the price sometimes spiking higher on security fears, the $16.50 calls in the next month look like an interesting trade that could potentially double or triple… but might go to zero, so take quick profits if you get them.