Transocean Ltd., together with its subsidiaries, provides offshore contract drilling services for oil and gas wells across the world. Looking at the chart and using the Ichimoku Cloud, every single matrix leads me to believe this stock is headed lower. It is trading below the Ichimoku Cloud, it is under the 9- and 26-day moving averages, and previous performance is weak (the stock hit a new 52-week low today).
Combined with the above bearish arguments, today we saw a trader come in and buy over 12,000 RIG May 37 Puts for $0.70. I think this is smart money and decided to follow, paying up slightly ($0.77) in the same line and currently close to getting filled at my first price target of $0.90.
Let’s break down my trade:
The Trade: I bought the RIG May 37 Puts for $0.77
Risk: $77 per 1 lot
Targets: $0.90, $1.10, $1.30 and $1.50
Greeks of this Trade:
Delta: Short
Gamma: Long
Theta: Short
Vega: Long