A Long-Dated Options Bet on Transocean

The January 2011 120 strike calls in Transocean(RIG Quote) were bought more than 20,000 times today for a price of around $3.40.

Shares of RIG finished the day at $46.94, up a little over 1%. A look at this activity gives an interesting view of bottom-fishing, as well as a long-dated option, commonly referred to as LEAPS (long-term equity anticipation securities).

In order for these calls to be profitable at expiration, the stock needs to be higher than $123.40, which is the strike of the call, plus the premium that was paid for the calls. That price level, vs. the current price of the stock, shows us just how far the shares of RIG and companies like it have fallen this year. As recently as Sept. 26, RIG was at $121.83.

...