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Options Spotlight: Nabors Industries Limited

A bullish candidate sees a surge in put trading

by Jocelynn Drake (jdrake@sir-inc.com) 10/30/2009 10:15 AM

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This week's edition of Options Spotlight takes a look at Nabors Industries Limited (NBR: sentiment, chart, options). Nabors Industries Limited is one of the world's largest drilling contractors, according to Hoover's. Overall, the company has 528 land-drilling rigs, and 592 U.S.-based and 171 international land workover and well-servicing rigs. Nabors Industries operates across the U.S. and in Africa, Canada, Central and South America, and in the Middle East. Its offshore equipment includes 37 platform rigs, 13 jack-ups, and three barge drilling rigs. Nabors also provides oil field hauling, maintenance, well logging, engineering, and construction services, and it invests in oil and gas exploration.

On Oct. 20, the company reported that third-quarter earnings fell 85%, hurt by foreign-exchange losses and other impairments, though Chief Executive Gene Isenberg called the quarter a bottom to the downturn. NBR posted earnings of $29.5 million, or 10 cents per share, down from $194 million, or 67 cents per share, a year earlier. Excluding distortions for a ceiling test, impairments in the oil and gas operations and foreign-exchange losses, earnings fell to 15 cents from 67 cents. Revenue fell 44% to $803.6 million. Analysts had forecast the company would earn 16 cents per share on revenue of $824 million. Despite the disappointing earnings, the company has maintained its impressive uptrend.

In the Options Spotlight, I shine a light on what's happening in the options world. In the case of Nabors Industries Limited, put activity has been brisk on the shares as investors attempt to call a top to the security's rally. Has this stock's uptrend finally reached an end? For a closer look at Nabors and its sentiment backdrop, please click on the video button below.

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Options Stew: A Taste of the Week's Spiciest Plays

(11/20/2009 10:45:27 AM)

Welcome to our new video series, Options Stew, where we take a look back at what's been cookin' in the option pits this week. Join us as we sample just a few of the unusual option plays from the past week, with our "recipe" broken down into three unique segments:

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Schaeffer's Media Outtake: Thoughts on Hedging, Volatility

(11/19/2009 4:15:00 PM)

"Standard & Poor's, the world's leading index provider, announced today the launch of the S&P 500 Dynamic VEQTOR Index which dynamically allocates between equity, volatility and cash to provide broad equity market exposure with an implied volatility hedge. 'Implied equity volatility typically has a strong negative correlation to equity market returns, and is considered a useful tool to hedge against the potential downside risk of the broad equity market,' says Liz Taxin, Director of Strategy Indices for S&P Indices. The S&P 500 Dynamic VEQTOR Index is comprised of three components: Equity, as represented by the S&P 500; Volatility, as represented by the S&P 500 Short-Term VIX Futures Index; and Cash, as represented by the Overnight LIBOR rate. The Index allocates between equity and volatility based on the combination of realized and implied volatility trend decision variables, and these allocations are evaluated on a daily basis."
(PR newswire � 11/18/09)

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Put Trading Swells on J. Crew Group Ahead of Earnings

(11/18/2009 11:05:48 AM)

Retailers continue to line up for the earnings confessional, and one particular high-flyer is slated to release its quarterly report next week. J. Crew Group Inc. (JCG: sentiment, chart, options) is known for its preppy fashions, including jeans, khakis, and other basic (but often pricey) items sold to young professionals. J. Crew sells through its catalogs, Web sites, and some 300 retail and outlet stores in the U.S. under the J. Crew, crewcuts (for kids), and Madewell banners. Madewell, launched in 2006, is a women's-only collection of hip, casual clothes.

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Drilling Down on Rowan Companies' Rally Prospects

(11/18/2009 10:00:00 AM)

Rowan Companies Inc. (RDC: sentiment, chart, options) performs contract drilling of oil and gas wells. Its fleet consists of 22 jack-up rigs and 32 land-drilling rigs. The company operates primarily in the Middle East, Texas, the Gulf of Mexico, and the North Sea.

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Drug Delay Prompts Put Trading on ISIS Pharmaceuticals, Inc. (ISIS)

(11/17/2009 1:50:13 PM)

Bearish option bettors have virtually blitzed ISIS Pharmaceuticals, Inc. (ISIS: sentiment, chart, options) today, with intraday put volume skyrocketing to nearly 38 times the norm. The pharmaceutical firm this morning confessed that it's delaying plans to seek approval for experimental drug mipomersen by nearly a year, from mid-2010 to mid-2011.

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Pre-Earnings Option Activity Accelerates on Sears Holdings Corporation

(11/16/2009 1:55:56 PM)

Sears Holdings Corporation (SHLD: sentiment, chart, options) has been a hot topic on both sides of the options aisle today, as investors race to place their bets ahead of the retailer's looming turn on the earnings stage. According to Thomson Reuters, the firm is expected to report its third-quarter figures before the opening bell on Thursday, Nov. 19.

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Options Traders Bulk Up on Puts on Software Vendor

(11/13/2009 12:34:23 PM)

Options players are placing some heavy bets that salesforce.com inc. (CRM: sentiment, chart, options) is going to suffer a disappointing earnings report next week, as traders load up on puts. The International Securities Exchange (ISE) has reported 2.7 puts purchased to open for every one call purchased to open during the past 10 trading sessions. This ratio of puts to calls is higher than 93.8% of all those taken during the past year. In other words, puts are significantly more popular than calls among traders.

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Hopes Are Riding High for GameStop's Earnings

(11/13/2009 11:35:33 AM)

The video game sector is struggling. U.S. video game sales dropped by 18% in October compared to the same period last year, according to the latest data from NPD Group. Meanwhile, analysts had forecast a more modest decline of 11%.

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Options Stew: A Taste of the Week's Spiciest Plays

(11/13/2009 10:55:42 AM)

Betting on a Short-Term Bounce for First Solar, Inc. (FSLR)

(11/12/2009 3:15:41 PM)

Call traders have been fond of First Solar, Inc. (FSLR: sentiment, chart, options) today, despite the solar concern's retreat into the red. In afternoon trading, the security has already seen roughly 18,000 calls cross the tape � nearly tripling its average intraday volume of fewer than 6,250 contracts.

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Options Spotlight: Nabors Industries Limited

A bullish candidate sees a surge in put trading

by Jocelynn Drake (jdrake@sir-inc.com) 10/30/2009 10:15 AM

NBR

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options