There seems to be a short squeeze in the stock caused by more open call contracts than shares outstanding.

BTUUQ has tripled in price the last few days and the debt prices continue their climb. Call option prices are soaring. The catalyst for this surge is the 2. Besides the spot price soaring, the negotiated Oct. Many BTUUQ investors, therefore, are thinking "happy days are here again. Other possible reasons for the recent price explosion are: It was already extended before to Nov.

Many investors feel that additional time is bullish because it would allow for even greater improvements in the coal industry.

This is a repeat of what happened in early March of this year. Besides the BTUUQ shares sold short, a possible short squeeze may be caused by the extremely large open interest in call options compared to the number of shares outstanding.

This total ofcontracts or 28, shares compares to only Clearly, there are a large number of naked call sellers. Other investors may have made the same mistake in adding up Jan.

I added up all contracts with trading volume from finra. The current total of Jan.

Adding the two different day amounts is like adding apples and oranges, but the total is17, shares This total plus other contracts still is impacting the squeeze. The focus of investors is now on Peabody's Australian operations. The Australianwhich may require subscription to view articles. With the dramatic price increases for coking coal, profits, not losses, are expected for the second half The Chinese, that usually buy in the spot market and not under quarterly agreements, cut the number of days coal miners could work to from days.

This caused a production decline. In addition, there has been some flooding and issues of getting coal to ports. Steel mills that do not want to incur the large costs of shutting down a mill and then later restarting it because of lack of coal, may have been doing some panic buying to make sure they have available coal. Therefore, I am not sure if this large price increase is just a temporary windfall or is it peabody stock options to last through Natural gas prices have soared since Peabody filed for bankruptcy on April 13, but peabody stock options the demand nor the price of domestic thermal coal has soared.

The EIA released their latest short-term coal outlook on Oct. It forecasted a slight improvement in coal production next year from this year, but it is still low from prior years. Thinly traded stocks monthly operating report for September was filed with court on Oct.

These reports are poor quality and do not follow GAAP, but they often show trends. Total monthly revenue in Sept. The amount that the 1liens have as a claim on secured assets has not been settled yet.

The issue is the classification of long-term debt as actually a short-term liability. First liens want them classified as long term, while other creditors want them classified as short term because the 1liens have a claim on the total assets less the short-term liabilities.

If they are classified as short term, the other creditors have a much intraday forex trading "pot" for potential recovery under a reorganization plan. There is also the issue about how the value of Peabody's Australian operations flow to the U.

The 1liens have a secured lien on all of the shares of the holding company that owns the Australian operations via multiple corporate layers. The complexity of the multi-billion dollar loan that the Australian operations owe the U.

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The question is if paying off this inter-company loan would greatly reduce the value of the Australian shares 60 second binary options trading brokers 5 minutes secure the 1liens.

The cash from any inter-company loan payment would flow into the "pot" for unsecured and secured creditors even perhaps BTUUQ shareholders. I have business associates that bought massive amounts of Peabody's debt after they filed for bankruptcy and continued to buy through July based on their expectation of a Trump win, which they feel would be very bullish for coal.

They never even really focused on met coal price increases in Australia. Most other investors, however, have been very much focused on Peabody's Australian operations.

I sold my notes in June, except I kept my holdings of the convertible bonds, based upon the lack of available detailed information on the large inter-company loan.

BTU Option Chain | Peabody Energy Corporation Comm Stock - Yahoo Finance

The convertible bonds I held are a "lotto ticket" type of trade on the price of call. They have risen 14x since June. Clearly the soaring met coal prices in Australia have pushed up the prices of BTUUQ and the notes, but there are collectively other positives that occurred that have had an influence on BTUUQ. There are too many uncertainties and lack of information on the important inter-company loan, for me to recommend purchasing BTUUQ or the notes.

In addition, short squeezes are almost impossible to handicap. They are as risky as a horse race.

During the short squeeze during March, I had a large call option position which I closed when BTU hit a limit price I had for the stock. Too many traders forget to bank profits, especially during squeezes. I am keeping my convertible bonds, but I may sell if I forecast a win by Clinton as we get closer to election day or if they hit my limit price.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it other than from Seeking Alpha. I have no business relationship with any company whose stock is mentioned in this article.

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Peabody Energy Stock Price Triples This Week - What's Up? Summary There seems to be a short squeeze in the stock caused by more open call contracts than shares outstanding. Met coal prices have soared the last four months in Australia. The September monthly operating report was filed on Oct. Natural gas prices have soared since the bankruptcy filing. Want to share your opinion on this article? Disagree with this article? To report a factual error in this article, click here. Follow WYCO Researcher and get email alerts.