BP Options Bets… Going to $10?

Posted in Options 
June 9th, 2010

BP plc (NYSE: BP) is under fire, as if that is not the understatement of the decade.  While shares fell over 16% and were headed to close close to $29.00 today there was a hell of an options trading pattern in the PUT options.  BP had explosive options trading down all the way in the PUT contracts under $20 and even down to $10 and lower…. This is the data shortly before the closing bell just on the JUNE-2010 CALLS alone:

Strike Contracts Open Int.
$7.50 1,623 1
$10.00 1,740 1
$12.50 2,958 2
$15.00 5,448 1
$17.50 5,440 225
$20.00 15,487 1,749
$22.50 11,605 3,452
$25.00 28,504 9,463
$27.50 26,642 3,982
$30.00 47,171 16,424
$32.00 17,145 6,212
$33.00 10,518 5,099
$34.00 9,783 5,933
$35.00 14,572 26,015

If you look, that is a first for options trading.  The prior open interest was listed as a whopping 5 contracts spread out among the $7.50 to $15.00 PUT strikes before today.  Many of these are sure to be just extremely low probability high-risk vs. high-reward scenarios.  Still, it will make you wonder….

JON C. OGG

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