Friday, September 3, 2010

Call Buyers Crush on Anadarko (NYSE:APC)

Rumors are flying that BHP Billiton (NYSE:BHP) is not just interested in fertilizer and Potash Corp. (NYSE:POT), but may be eyeing up Anadarko Petroleum (NYSE:APC) as well.

Shares of Anadarko surged yesterday after the reports came out, rising above 5 percent at one time, but drawing back and closing at $50.24, gaining $1.45, or 2.97 percent at the end of the trading session.

Call volume were the heaviest for Anadarko for the September $55 strike, with over 9,000 contracts being exchanged by a little after noon EDT. Close to 4,000 of those were acquired at an average premium of $0.51 apiece.

For the September $52.5 strike, call buyers bought close to 2,000 calls at a premium of $1.01 each. Another 2,900 calls now in-the-money calls were scooped up at the September $50 strike for an average premium of $1.85 each.

Interestingly, the frenzy continued into the November $55 strike, where traders acquired about calls for an average premium of $2.29 each.

If the acquisition rumors persist, or if they're confirmed to be true by a bid from BHP, calls should shoot higher before the expiration.

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