Halliburton Company (HAL)

[WilliamFL]

Halliburton call spreads suggests more gains.

Real-time equity news U.S. stock market report 1150 ET 09 Aug

Oil service company Halliburton Co has attracted early bullish option activity with an investor purchasing the September $50-$55 call spread, said Patrick Mortimer, director of option trading at Pipeline Trading Systems. The investor paid 36 cents for the 1x2 ratio call spread, trading 5,000 by 10,000 times. This strategy will need the shares to trade at least 15.3 percent higher from their current level of $43.66 over the next 5-1/2 weeks before any profits will be seen. Maximum profits will be reached if the shares settle at $55 by Sept. 16 expiration, the same price the shares were trading at on Aug. 1, he said. "Oil dropped to its lowest level of the year earlier this week, causing the PHLX Oil Service Sector Index to lose as almost 25 percent of its value during the month of August," Mortimer said. "Wells Fargo came out this morning stating offshore drillers have fallen below their estimated NAVs and views their risk/reward ratios as very attractive." The option investor seems to agree with this statement and is looking for the shares to climb back to their late July levels, he added. Reuters Messaging: [e-mail] 1122 ET 09Aug2011