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Thursday, December 7, 2023

Procter & Gamble Weekly Call Volume Jumps Ahead Of Conference

Today’s tickers: PG, CHS & FIRE

PG – Procter & Gamble Co. – A burst of call buying in the weekly options on consumer products giant Procter & Gamble appears to be a sizable bullish bet that shares will rally heading into the weekend. Shares in PG are up 0.30% today at $64.61 ahead of the Consumer Analyst Group of New York Conference in Boca Raton, Florida on Thursday. Statements from P&G’s top management, particularly regarding details of the Company’s cost cutting plans, could move the stock tomorrow. The investor or investors responsible for exchanging more than 16,000 calls at the Feb. ’24 $65 strike against open interest of 2,037 contracts for an average premium of $0.15 each, may profit at expiration should shares settle above the average breakeven price of $65.15.

CHS – Chico’s FAS, Inc. – Bullish traders who purchased Chico’s call options in advance of the retailer’s positive earnings surprise on Wednesday, in some cases, doubled their money overnight. Shares in the seller of women’s clothing and accessories rallied as much as 15.5% to $14.80 this morning after the Company beat top- and bottom-line fourth quarter estimates, and forecast higher than expected full year sales of $2.5 billion. Options players speculating shares in Chico’s could surge after earnings snapped up call options in the front month that today trade at substantially higher premiums. One strategist appears to have purchased around 1,400 calls at the Mar. $14 strike for a premium of $0.25 each yesterday afternoon. The sharp rise in CHS shares this morning now has the $14 strike calls trading at more than twice that amount, with a last traded price of $0.70. Call selling at the $14 strike today may represent profit taking on the position. Meanwhile, fresh call selling up at the April $15 strike, where some 425 contracts sold for an average premium of $0.80 each, indicates some strategists expect the stock has made its move and has little fuel left to run higher. Investors selling the call options walk away with the full $0.80 in premium per contract as long as shares in the women’s apparel retailer settle below $15.00 at expiration day in April.

FIRE – Sourcefire, Inc. – Shares in the provider of network security functions and solutions jumped nearly 25.0% to a record high of $44.73 today on better-than-expected fourth-quarter earnings and full year guidance from the Company. Call activity on Sourcefire this morning suggests shares may extend gains and continue to hit fresh highs in the next few months. More than three call options are changing hands on the stock for each single put in play, with the bulk of volume building in the March and April expiries. Investors positioning for shares in Sourcefire to continue to climb ahead of April expiration exchanged some 640 calls at the April $45 strike against open interest of just 15 contracts. The majority of the volume appears to have been purchased for an average premium of $2.39 apiece. Buyers of the $45 strike calls stand ready to profit at expiration should FIRE’s shares rise another 5.95% to surpass the average breakeven point on the upside at $47.39. The April $50 strike calls also attracted buyers, with around 205 of the contracts trading at an average premium of $1.06 a-pop. Finally, traders already long call options on Sourcefire ahead of the nearly 25.0% move to the upside have the opportunity to take big profits. Investors that appear to have picked up around 265 calls at the Mar. $45 strike for an average premium of $0.30 back on February 9, are now holding contracts that trade at $1.70 at last check.


Caitlin Duffy

Equity Options Analyst

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