Yesterday we saw unusual call option activity in Anadarko Petroleum, an independent oil and gas company. The biggest trade of the day was the purchase of 2750 Nov. 80 calls for $0.37 with the stock trading at 69.10. This is a bullish bet that APC will be above 80.37 at Nov. expiration, which will require a 16% move in the next 35 days. Approximately 50% of Anadarko's revenue is derived from their natural gas business, which means the stock is likely to rally along with natural gas. Currently the stock is consolidating at support in the 68-69 area, and this trader believes a breakout will take it above 80. We see Anadarko as a hedged play on natural gas; since its business is split 50-50 between oil and gas, its stock will have less volatility than the price of natural gas but will certainly benefit from a rally. If Anadarko breaks out above 80, the next major resistance level is its 52-week high of 88, which means this call option could potentially return a lot but at just $0.37 it does not require taking much risk.
ECB officials said last night that ECB President Mario Draghi will likely wait to hear Germany’s Constitutional Court’s ruling on the EFSM before publicly unveiling his plans. Many were hoping Draghi would unveil his plan after the ECB’s September 6th meeting, but this is becoming increasingly unlikely. Today Reuters is reporting that Germany is the latest European nation to begin studying the possible impact of a Greek exit from the Euro. This comes ahead of Chancellor Merkel’s meeting with Greece’s Prime Minister today. Merkel has repeatedly said that she would like Greece to remain in the common currency, though clearly someone in Germany believes a Greek exit is possible outcome worth preparing for. This morning US new durable goods orders numbers we released for July, coming in at a gain of 4.2% M/M. Though this was strong than expected, it was primarily driven by strong aircraft sales. Non-defense orders excluding aircraft were down a sharp 3.4% M/M versus a 0.2% decline expecte...
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