Posts: 575
Threads: 49
Joined: Dec 2011
The implied volatility of the June and July call and put options is in the 90% to 100% range. Ridiculous.
Speculative buyers of both calls and puts are paying a very high premium, as are the shorts buying insurance.
The writers ("house") are licking their chops, as the house usually wins.
VS
Posts: 2,505
Threads: 219
Joined: Dec 2011
Reputation:
109
I'm not selling any calls! Maybe when it hits 200 I'll sell some 300s that are 6 months out for 40 bucks.
Posts: 12,025
Threads: 1,809
Joined: Apr 2008
Reputation:
227
Well, perhaps. But while the time frame is short, there are share moving announcements possible, I would say
Since this topic is 'high speculation,' here is a hypothetical announcement that might upset the 'bank.' Lets say Shell buys most or all of EA and thereby solves:
- all political problems
- all funding problems
- de-risks the entire project
InterOil could embark on serious drilling of those other 12 possible reefs and could even monetize BT (and any new finds) with the smaller scale technologies.
Depends a little on price, but I would say that's rather attractive. Not sure it is in the cards, but I think there are quite a few outcomes possible that would have a big impact on the share price, warranting those high option premiums. This is just one example.
Even more dramatic for the stock price could be a bidding war for the company. Lets not forget that they have a very attractive resource position and prospects on the edge of a booming LNG market.
Posts: 575
Threads: 49
Joined: Dec 2011
STP,
Of course, anything is possible, but what are the probabilities in the time frame of the June/July option expirations?
It appears short-term greed has a hold on some option players' cojones.
VS
Posts: 12,025
Threads: 1,809
Joined: Apr 2008
Reputation:
227
Greed or fear, or both.
I have no idea of the probabilities, but Shell would not need political vetting, another big major is likely to be considered good enough.
What is unmistaken is that their resource position is very attractive and the IB's work must be nearing an end.
Combine these two 'dots' and you have the possibility of funny outcomes, I would say.
Posts: 575
Threads: 49
Joined: Dec 2011
Somebody must have been "listening."
The implied volatility of the June/July option series is being taken down as we speak.
VS
