Mariner Put Trading Soars to Record After Gulf of Mexico Rig Catches Fire
Mariner Energy Inc. put option trading surged to a record after the oil and natural gas producer reported an explosion and fire at a platform in the Gulf of Mexico.
Almost 55,000 puts to sell the stock changed hands, 842 times the four-week average and five times the number of calls to buy. Mariner fell 2.6 percent to $22.75 as of 4 p.m. in New York and earlier lost as much as 16 percent. The most-active contracts were September $20 puts, which more than tripled to 35 cents and accounted for half of the bearish volume. The stock hasn’t closed below $20 for three months.
A Mariner platform in the Gulf of Mexico, 80 miles off the Louisiana coast, was struck by an explosion and fire, according to the U.S. Coast Guard. Mariner spokesman Patrick Cassidy told CNBC that no oil spilled from the platform and that all wells have been shut.
“Reports of the explosion incited frenzied options activity on the stock as investors seemed to expect the worst- case scenario was upon them,” Caitlin Duffy, an equity options analyst at Greenwich, Connecticut-based Interactive Brokers Group Inc., wrote in a note to clients.
Implied volatility, the key gauge of option prices, for at- the-money Mariner options expiring in 30 days surged to a two- month high of 41.98 from 26.16 yesterday.
Mariner shares have risen 96 percent this year, compared with a 1.8 percent decline for the Standard & Poor’s Midcap Energy Index. More than 48 million Mariner shares changed hands today, 11 times the four-week average and the most since April.
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