AeroVironment Calls In Play As Shares Take Off
by Option Review - July 17th, 2013 8:20 pm
Today’s tickers: AVAV, YHOO & JCI
AVAV - AeroVironment, Inc. – Shares in the maker of drones are ripping higher on Wednesday morning, up as much as 15.5% in the early going to $23.85, the highest level since October of 2012, on reports activist investment firm, Engaged Capital LLC, has taken a roughly 5% stake in the company. Options traders betting the stock continues to move higher in the near term snapped up call options on AeroVironment. It looks like traders picked up more than 400 now in-the-money calls at the Jul $22.5 strike for a premium of $0.40 apiece during the first 30 minutes of the trading session. Intraday gains in the price of the underlying since those contracts were purchased has pushed the price tag on the $22.5 strike calls up to $1.25 each as of 11:20 a.m. ET. Bulls also appear to have purchased roughly 400 in-the-money calls at the Aug $22.5 strike for an average premium of $0.66 per contract in the early going. Premium required to purchase the Aug $22.5 calls has more than doubled since this morning to $1.60 as of the time of this writing. Finally, around 380 calls changed hands at the Aug $25 strike versus zero open interest, with most of the volume purchased for an average premium of $0.49 each. Traders long the Aug $25 strike calls stand ready to profit at expiration next month should shares in AVAV rally 8.4% over the current price of $23.51 to exceed the average breakeven point at $25.49.
YHOO - Yahoo! Inc. – Options volume is soaring on Yahoo today, with more than 125,000 contracts traded on the stock by 11:35 a.m. in New York versus average daily volume of around 37,000 contracts. Most of the action is in YHOO calls, with shares in the Internet media…