We saw at least one investor take a strong bullish stance on the company by purchasing a call one-by-two, selling one option to buy two. The July 40 calls have crossed the tape roughly 3,500 times versus open interest of 83 contracts, while the July 45 calls have traded more than 7,000 times on the day and are home to 659 contracts of open interest.
Judging from the open interest, investors traded these options to open. In this bullish ratio spread, the investor sold the July 40 calls for roughly $7 per contract to help finance the purchase of double the number of July 45 calls (currently priced at $4.10) for a net debit of roughly $1.20 for the spread.
If PBR shares close at $45 on July expiration, the investor incurs the maximum loss ($6.20 per spread, which is the difference between the strike prices plus the premium paid). The breakeven on this trade is $51.20, and if the stock soars higher than that level during the next six months, the investor will turn profits.
Implied volatility of the July 40 calls is currently 34, and the July 45 calls have an implied volatility of 33, compared to the 30-day historical volatility of just 23%.
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