Nabors Industries dropped sharply after earnings missed expectations, but a large trade is betting on a comeback by summer.
Investitute’s tracking systems today identified the purchase of 23,000 June $13 calls in one print for $0.15 as the stock traded for $10.75. Open interest in the strike was only 599 contracts at the beginning of the session, showing that this is a new position.
Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.
NBR fell 10.14 percent to finish the day at $10.55. The energy-drilling services company reported a wider loss than expected after yesterday’s close.
Today’s calls are looking for NBR to rise above $13.15 by expiration in mid-June, a level where it was trading just two weeks ago.