Sarah Wasserman (swasserman@sir-inc.com) Transportation titan DryShips Inc. (DRYS) traveled to the earnings spotlight after the close on Wednesday, reporting consensus-beating profits. Excluding items, DRYS' third-quarter profit arrived at 38 cents per share on $225.5 million in revenue, crushing analysts' prediction for a profit of 25 cents per share on revenue of $216.9 million. In response to its better-than-expected profits, DRYS explained that the ultra deepwater market had "turned a corner" during the past few months.
As a result of this upbeat report, DRYS has sailed some 10.6% higher today, to trade around $5.74. For the record, DRYS hasn't closed a week above the $5.50 level since April 30.
Option players have flocked to place their post-earnings bets on DRYS today, with roughly 53,000 contracts changing hands -- quadruple the ocean transportation issue's expected daily option volume. Calls have comprised the bulk of today's activity, with roughly 44,000 contracts crossing the tape.
Most popular, by far, has been DRYS' November 5.50 call, with 9,702 contracts changing hands so far. What's more, the majority of these calls traded at the bid price, indicating they were likely sold. In light of today's post-earnings rally, traders may be liquidating these newly in-the-money calls ahead of tomorrow's expiration.
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