Scorpio Tankers president Robert Bugbee has spent $1.5m to place a new bet on call options on the company’s shares.
He snapped up call options for 234,300 shares in the New York-listed product tanker giant.
The call options have a $67.50 strike price and expire in January 2025.
Call options are contracts that give the buyer a right to buy shares at a specific price, and they can be profitable if the stock rises above the strike price.
In effect, this means Bugbee is betting that Scorpio’s stock price will rise above $73.90 — which is the point at which TradeWinds calculates that the $1.5m investment becomes profitable — by January.
And Scorpio Tankers’ shares are already well on their way to that point.
They reached $69.48 at the Wednesday close of trading on the New York Stock Exchange, before Scorpio announced Bugbee’s call option bet.
Then they surged on Thursday, closing the day at $71.06.
By late morning trading on Friday, Scorpio’s shares reached $71.49, representing a 2.9% gain since Wednesday’s close.
TradeWinds explained in a recent edition of the Streetwise newsletter that Bugbee has built “something of a side business” by investing in Scorpio call options.
For example, he spent $7m in February to buy call options on 556,000 common shares, with a strike price of $60 and an expiration date this month.
He paid the equivalent of $12.60 per common share, and filings indicate he sold those contracts on 28 June at prices ranging from $21.80 to $23.90.
Scorpio shares were trading that day around $84, or more than $15 higher than when Bugbee bought the options.
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