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Friday, December 1, 2023

Under Armour Calls Active

Today’s tickers: UA, AIG & TIE

UA – Under Armour, Inc. – Options on the athletic apparel maker are more active than usual today, with volume of 11,300 contracts running more than four times the stock’s 90-day average options volume of 2,475 contracts. Shares in Under Armour are down 0.80% at $98.19 in early-afternoon trade, slipping Tuesday after hitting a new all time high of $99.35 on Monday. Options traders exchanging around 2.5 calls on the name for each single put in play so far in the session appear to be positioning for the price of the underlying to continue to secure fresh highs in the next few weeks. In- and out-of-the-money calls in the front month are seeing the most action, with the April $95 and $97.5 strike calls trading upwards of 1,100 times each. Traders positioning for fresh record highs in the price of the stock snapped up more than 500 calls at each of the April $105 and $110 strikes, paying premiums of $1.00 and $0.33 apiece, respectively. Call buyers may profit at expiration should Under Armour’s shares post sharp gains prior to the Company’s first-quarter earnings report on April 24th. The April contract calls expire several days ahead of UA’s earnings release. Traders long the call options may profit at April expiration as long as Under Armour’s shares surge 6.7% and 11.1% to top average breakeven prices of $106.00 and $110.33, respectively.

AIG – American International Group, Inc. – Shares in AIG have mostly traded within the range of $20.00 to $30.00 during the most recent six month period. Activity in long-dated call options on the insurer, however, suggests one strategist is positioning for the price of the underlying to break out strongly to the upside at some point during the next ten months. Shares in American International Group, Inc. are up 2.2% this morning at $29.70 after analysts at Deutsche Bank predicted the insurer’s stock buyback program may be larger and more rapid than is implied by the current share price. The largest single trade in AIG options this morning indicates one player expects the shares to trade at a substantial premium to the current price by January 2013 expiration. The trader appears to have purchased a block of 7,280 calls at the Jan. 2013 $45 strike for a premium of $0.35 apiece, though upwards of 9,800 call options have changed hands at that strike in the first half of the session. Profits are available to the call buyer at expiration as long as AIG’s shares surge 53.0% in the next ten months to top the effective breakeven price of $45.35. Shares in AIG last traded above $45.35 in January 2011.

TIE – Titanium Metals Corp. – The titanium producer is in rally-mode today, with shares in the Dallas, Texas-based Company trading 0.90% higher on the day at $13.86 just after 11:45 a.m. in New York. Front-month call buying on Titanium Metals Corp. may mean some market participants anticipate the stock will extend gains in the near term. Options volume on TIE is concentrated in the April $14 strike call, where some 4,750 contracts changed hands against 1,525 open positions. It looks like most of the day’s volume was generated by buyers paying an average premium of $0.40 per contract. Traders long the calls profit at expiration as long as shares in the metal producer rally another 4.0% to surpass the average breakeven price of $14.40.


Caitlin Duffy

Equity Options Analyst

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