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McDermott Options Jump on Buyout Rumor

By Jon "DRJ" Najarian, co-founder of OptionMonster.

McDermott International (MDR - Get Report) is seeing heavy options activity amid rumors that PetroChina (PTR - Get Report) is interested in buying the engineering and construction company.

Normal call activity for McDermott in the 30 days has been 5,100 contracts for a full session, but today some 22,400 contracts traded in the first 30 minutes alone, according to OptionMonster's real-time tracking systems. The feeding frenzy saw 8,500 calls change hands at the May 20 strike against open interest of just 1,506.

McDermott shares are up nearly 5% on the session to $16.68 in midday trading.

McDermott works in offshore oil and gas construction and power generation. The space has been hot lately, especially with interest in Calpin (CPN - Get Report) and Mirant (MIR) in the power industry and Halliburton (HAL - Get Report) in oil and gas. Some of today's chatter has McDermott and PetroChina in late-stage acquisition talks.

The writer has long positions in McDermott.

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SYM TRADE IT LAST %CHG
MDR $5.24 0.00%
CPN $21.24 0.00%
HAL $49.11 0.00%
PTR $129.50 0.00%
AAPL $128.95 0.00%

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