Checkout Options Trading Research for free Articles! http://www.optionstradingresearch.com Recently, there has been some unusual options activity in Apache $APA.

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3. Hi, My name is Steve and I‘m with Options
Trading Research, today were reviewing
our recently published article…

4. Unusual Options Activity In Apache $APA

5. As many of you know, unusual options
activity can be a valuable indicator as to
what traders are thinking, and more
importantly, where these stocks are
heading in the short-term.

6. This is something professional options
traders pay a lot of attention to, and for
good reason… Unusual options activity
can “tip off” big moves in a stock, either
up or down. So let’s take a look at some
‘interesting’ activity that caught our eye
this week:

7. Apache $APA is an independent energy
company focused on fossil fuels. The
company generates about $10 billion
revenues primarily from oil and natural
gas production. For a good description of
the company, follow the link.

8. $APA is trading at $47.77, down 22% for
the year. That’s 53% below the 52-week
high, and 11% from the 52-week low.

9. So what does unusual options activity in
APA tell us?

10. APA, like many oil and natural gas
companies, has hit hard times over the
past year. The precipitous drop in the
price of crude oil has really taken its toll
on fossil fuel production companies like
Apache. In fact, the stock is down over
50% from this time last year.

11. Despite the obvious pricing pressure in
the oil and gas industry right now, APA
still posted better than expected results
for last quarter. The company is
performing pretty well despite the
circumstances.

12. After all, there’s only so much
management can do when the price of oil
has been getting hammered for so long.
Here’s the deal…

13. This week, a trader sold a large block of
puts on APA. Keep in mind, a put option
makes money when the underlying stock
goes down, so selling a put option
benefits from a move in the opposite
direction (or no movement at all).

14. Specifically, a trader sold 25,000 October
47.50 puts for $2.90. The total cash
collected for this trade is roughly $7.3
million. Breakeven point for the trade is
$44.60.

15. Given the open interest, this trade is likely
an opening position.
Here’s the chart of $APA:

17. APA has clearly been under pressure for
the last year. The stock has struggled as
the price of crude oil has continued to fall.
The share price has been below the 50-
day moving average for some time now,
but it does appear to have ticked up in
recent days.

18. This trade suggests APA may have put in
a bottom. The most recent earnings did
shed some positive light on the company,
despite headwinds from falling oil prices.
Moreover, $7 million is a pretty big bet
that the stock isn’t going to drop below
$45.

19. It’s even more aggressive considering
there’s virtually unlimited loss potential
with this type of put selling strategy.

20. More Options Trading Ideas…

21. Keep in mind, there’s a lot more unusual
options activity going on than what we
discuss here. We just try to bring you
what we feel are the most significant
ones– and the ones you might actually be
able to make some money on!

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