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Travelers Put Options Active

TRV – Travelers Companies, Inc. – Shares in insurance company Travelers are slightly lower on Thursday morning, down 0.70% at $85.48 as of 11:05 a.m. ET, after the stock was downgraded to ‘Sell’ from ‘Neutral’ with a 12-month target price of $72.00 at Guggenheim Securities.

Options changing hands on TRV in the early going suggest one or more traders are bracing for the price of the underlying to extend losses ahead of the weekend. It looks like options traders picked up more than 1,400 of the Oct $85 strike puts at an average premium of $0.42 apiece. The puts may be profitable at expiration this week if shares in TRV decline another 1.05% from the current price of $85.48 to breach the average breakeven point on the downside at $84.58.

Overall options volume on Travelers Cos. Is hovering just below 2,500 contracts as of the time of this writing, which is roughly three times the stock’s average daily options volume of around 740 contracts. Travelers is scheduled to report third-quarter earnings ahead of the opening bell on Tuesday. 

TMO – Thermo Fisher Scientific Inc. – Options on the provider of technology and products for pharmaceutical, biotech and science research companies are more active than usual today, with volume topping 5,500 contracts in the first hour of trading versus the stock’s average daily options volume of around 1,200 contracts. Shares in the name are up 1.25% on the session at $94.67 as of 10:50 a.m. in New York trading.

The most traded contracts on Thermo Fisher Scientific this morning are the Oct $95 strike calls, with more than 5,000 contracts in play against open interest of 470 contracts. Time and sales data indicates one trader purchased the bulk of the volume at a premium of $0.20 each within the first 10 minutes of the opening bell. The bullish position makes money at expiration this week if TMO shares rally another 0.55% to exceed the effective breakeven price of $95.20.

Traders targeting the November expiry call options may be positioning for shares in the name to rally leading up to and following the company’s third-quarter earnings report next Wednesday. It looks like traders snapped up roughly 1,000 of the Nov $95 strike calls for an average premium of $1.94 each, and around 300 of the Nov $100 strike calls at an average premium of $0.63 apiece. The stock today traded up to a new multi-year high of $94.90. 


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