Aug 17th option expiration

[jft310]

Look at the expiring Aug 17th options. The $80-90 strike open puts there are over 16,000 open contracts. The $80 trade for about $1.25 so the market maker thinks they are just insurance. Who bought all those puts.?? They are gonna lose that insurance money based on the premiums. The $85 strike at @ $3 has some possibilites ,could IOC trade at $82 next friday well sure. In order for the $85 buyer to make money the IOC PPS must drop quite a bit. With a new CEO wanting to get a good start and the pressure certain large shareholders are putting on mgt for some the disclosure by Tuesday AM in my opinion the $85 buyers will lose the premium they paid. In full disclosure I own zero, nada Aug options and await news soooooon.Welcome all others opinions

[trans]

I'm not sure, but as I recall, there were 4x5000 puts put on right after last month's expiration. As I have reported last month, the call open interest and the put open interest in IOC is skewed far away from a typical COI/POI monthly distribution of around 2 to 1 or 3 to 2. Interoil is the very rare opposite nearby, about 1 COI to 2 POI, and an estimated count 2 days ago showed 21,000 COI and 42,000 POI. My conclusion, is that the big shorts in IOC are the ones that for the past few months at least, are using the large put positions to influence their short positions and have been making a lot of money on this trade. Now the initial strikes made a month ago were the 70,75,80,and 85 as I recall. recently, tho it seemed whatever they're doing here was moved up (rolled) 5 points to 75 to 85 and 80 to 90. Correct me if I'm off on this. So, I've guessed that the move up 5 points was because someone recalculated and moved those positions higher. the 20+,000 puts are still there like last month and maybe the 2-3 months (at least) even before that. A guess from this is that someone (shorts) wants this stock down around 80 or lower on the Aug expiration, but it may not get there. Lastly, the initial 5k put positions were put on around $ .69, 1.40, 3.50, and 7+, for the 70,75,80,85 puts. I figured these positions have cost about $2.50 to $3 average per put for the total amount. Would like to hear from those more knowledgeable in options to explain what they think the above would lead to in price action. tia trans

[cybersssss]

jft310...I think this week there is a major catalyst for a stock swing either up or down. IMO the stock will either be higher or lower then your stated amounts. For that reason a straddle is a better play for this week. This is my opinion on which I hold no interest on any options. Too risky at this point.

I really hope that the stock goes up this week based on the cc and Hession remarks. I further would hope that we hear about the deal in much more detail. I am afraid that if the market does not hear what it needs to then we have high risk to trade much lower. I see and feel that many long-term holders patience has worn thin.

[katytrader]

I'm not sure, but as I recall, there were 4x5000 puts put on right after last month's expiration. As I have reported last month, the call open interest and the put open interest in IOC is skewed far away from a typical COI/POI monthly distribution of around 2 to 1 or 3 to 2. Interoil is the very rare opposite nearby, about 1 COI to 2 POI, and an estimated count 2 days ago showed 21,000 COI and 42,000 POI. My conclusion, is that the big shorts in IOC are the ones that for the past few months at least, are using the large put positions to influence their short positions and have been making a lot of money on this trade. Now the initial strikes made a month ago were the 70,75,80,and 85 as I recall. recently, tho it seemed whatever they're doing here was moved up (rolled) 5 points to 75 to 85 and 80 to 90. Correct me if I'm off on this. So, I've guessed that the move up 5 points was because someone recalculated and moved those positions higher. the 20+,000 puts are still there like last month and maybe the 2-3 months (at least) even before that. A guess from this is that someone (shorts) wants this stock down around 80 or lower on the Aug expiration, but it may not get there. Lastly, the initial 5k put positions were put on around $ .69, 1.40, 3.50, and 7+, for the 70,75,80,85 puts. I figured these positions have cost about $2.50 to $3 average per put for the total amount. Would like to hear from those more knowledgeable in options to explain what they think the above would lead to in price action. tia trans

trans, I don´t claim any better insight than what you offer here.  However, as a long-time put seller (gasp!) I can say that I no longer pay much attention to the OI in puts in making guesses about the price movement of the equity.   The large volumes seen in some put strikes are typically parts of spreads, which in turn can be part of different strategies.  Thinking about the motivations of buyers to me is not likely to be productive either.  W. Tilson and friends have lost a ton of money betting on price drops and I am sure the buying of puts has been part of the losses.

My observation for consideration by those who look at option data is that the OI in call strikes gives a better insight into likely price movement as expiration appproaches.  My sense of it is that price is driven down to cause calls in volume to expire worthless.  With 5 days left to the August monthly series, the data to me suggest that the close is likely to be just under 85.  If Tuesday´s seance gives enough ammo to shorts, they may be able to move it down to a tad under 80.  A positive cc may make 90 the battlefield for Friday.

As a footnote to all of this, for me the IOC drama has given me the find of a lifetime.  As a long shareholder, I have used the margin allowed by the long position to write out-of-the-money puts for quite a while now.    I offer last Friday´s weekly option play for example, since many claim to be not involved with options.  On August 1, I collected about $9000 in premiums for puts expiring August 9.  The strike price was 75.  As an optimistic IOC long, I saw that as a good bet.

For this week´s series, I sold puts on July 2 for about $6.25 at a strike price of  $67.50.  I was at the AGM.   How could a long turn this down?    I won´t bore you with September´s and next January´s bets.......but you won´t be wrong in concluding that as an IOC long I feel that I can go a longer time without whatever certainty "the deal"  might have.

[IOCHUHU]

I put on a pretty big straddle late last week with in the money Aug puts and in the money Sep calls. If we don't get a signed Purchase and sale agreement with the conf call or in the press release unfortunately I think we sell off $5-$15 in the coming days.  I have until Sep for the stock to work higher and make big moola on the calls.  I hope I'm wrong and deal is announced and we move to triple digits. Either way I'll make money.  What do you guys think?

[katytrader]

I put on a pretty big straddle late last week with in the money Aug puts and in the money Sep calls. If we don't get a signed Purchase and sale agreement with the conf call or in the press release unfortunately I think we sell off $5-$15 in the coming days.  I have until Sep for the stock to work higher and make nig moola on the calls.  I hope I'm wrong and deal is announced and we move to triple digits. Either way I'll make money.  What do you guys think?

It has more finesse than I am capable of.  But I hope you are right about triple digits.

katytrader