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Monday, February 6, 2023

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Strategists Take To Goldman Weekly Call And Put Options

Today’s tickers: GS, SNE, INTC & GNW

GS – Goldman Sachs Group, Inc. – Shares in Goldman Sachs staged an intra-session comeback after opening lower on Tuesday. The stock is currently up 1.5% at $97.56 after earlier rising to $98.81, the highest since September 29. Call buyers tackling weekly options on Goldman may profit if the stock extends gains through expiration on Friday. A combined 7,000 calls changed hands at the Oct. ’14 $100 and $105 strikes, topping open interest levels in each case. Buyers are more active than sellers thus far in the session, with traders paying an average premium of $1.17 and $0.29 per contract for the $100 and $105 strike contracts, respectively. Bulls are not alone in populating short-term contracts, however, as demand for weekly puts is growing, as well. The Oct. ’14 $95 strike put is most active, with volume exceeding 3,200 lots against open interest of 808 contracts in early-afternoon trade. Put buyers shelled out an average premium of $1.90 per contract. Investors long the put options profit at expiration if shares in GS drop 4.6% to breach the average breakeven point on the downside at $93.10. JPMorgan Chase & Co. reports earnings on Thursday ahead of the opening bell. Shares in GS may respond in kind to JPM’s report, either to the upside or the downside, as investors search for signals ahead of the banking institution’s own earnings announcement one week from today. Options traders have exchanged more than 50,000 contracts on the stock as of 12:50 pm in New York.

SNE – Sony Corp. – A burst of fresh call activity on Sony Corp today suggests at least one options strategist is positioning for the price of the consumer electronics maker’s shares to rebound during the next several months. Shares in Sony rose 3.25% to $19.62 by 12:15 pm on the East Coast, despite comments from the company’s CFO, Masaru Kato, who told Reuters, “we don’t see any reasons for optimism” in regards to year-end sales. One investor appears to have purchased roughly 5,000 calls at the Jan. 2012 $21 strike, against paltry open interest of 331 contracts, for an average premium of $1.18 apiece. The bullish position may yield profits at expiration next year in the event that Sony’s shares rally 13.05% to surpass the average breakeven price of $22.18. Sony’s shares last traded above $22.18 back on September 1. The company is scheduled to report second-quarter earnings ahead of the open on October 27.

INTC – Intel Corp. – The chip giant reports third-quarter earnings one week from today. One strategist responsible for hefty prints in Intel Corp. put options this morning may be prepping for disappointment next week and the remainder of 2011. Shares in Intel gained 0.40% this afternoon to trade at $22.97. The stock has rallied an impressive 12.4% over the past seven days, and more than 17.0% since the beginning of September. But, a sizable ratio put spread on the stock yields maximum benefits to its owner should shares in the tech-bellwether surrender recent gains to drop to fresh 52-week lows by December expiration. The investor responsible for the large spread appears to have purchased 16,000 puts at the Dec. $21 strike for a premium of $0.72 each, and sold 32,000 puts at the lower Dec. $18 strike at a premium of $0.23 apiece. Net premium paid to initiate the transaction amounts to $0.26 per contract. The trader profits if shares in Intel fall 9.7% from the current price of $22.97 to breach the effective breakeven point at $20.74 by expiration day. Maximum potential profits of $2.74 per contract are available to the investor if INTC’s shares plunge 21.6% to settle at $18.00 at expiration in December. The spread may be an outright bearish bet on the chip maker or downside protection on a long position in the underlying shares.

GNW – Genworth Financial, Inc. – Call options on Genworth Financial are more active than usual this morning on reports of renewed takeover chatter. The rumor mill helped drive a more than 4.2% rally in the insurer’s shares to $5.68 by 11:35 am in New York. Near-term options are the most active contracts, with more than 9,600 calls changing hands at the Oct. $6.0 strike in the first half of the session. It looks like most of the calls were purchased for an average premium of $0.21 apiece. Call buyers profit if shares in GNW rally 9.3% over the current price of $5.68 to surpass the average breakeven point to the upside at $6.21 by October expiration. Bullish sentiment spread to the Nov. $6.0 and $7.0 strike calls, as well. It looks like investor picked up around 1,100 calls at the $6.0 strike for an average premium of $0.55 each, and purchased some 1,500 contracts at the $7.0 strike at an average premium of $0.26 a-pop. Investors long the higher-strike call options profit in the event that Genworth’s shares surge 27.8% to top $7.26 at expiration day next month. Shares in the insurer last traded above $7.26 at the beginning of August. GNW is scheduled to report third-quarter earnings after the final bell on November 3.


Caitlin Duffy

Equity Options Analyst

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