Options Look For Further Gains In Fortune Brands Home & Security
by Option Review - July 2nd, 2012 2:38 pm
Today’s tickers: FBHS, ORCL & WM
FBHS - Fortune Brands Home & Security, Inc. – Shares in the home and security products company that was spun off from Fortune Brands in 2011 are up 4.5% this morning at $23.27. Call options on the company, which sells products under well-known brands including, Master Lock and Moen, among others, are more active than usual today. Trading traffic in the August expiry calls suggests one or more investors may be positioning for the price of the underlying to rally to the highest level since the spin off. Upwards of 1,000 calls changed hands at the Aug. $25 strike versus previously existing open interest of 105 contracts. It looks like most of the calls were purchased for a premium of $0.40 apiece. Call buyers may profit at expiration next month should shares in FBHS rally another 9.2% to surpass the breakeven price of $25.40. Fortune Brands Home & Security is scheduled to report second-quarter earnings after the close of trading on July 25th.
ORCL - Oracle Corp. – A large bearish spread initiated in Oracle Corp. options this morning sees shares in the name potentially pulling back more than 20.0% from the current level during the second half of the year. Shares in Oracle are down 0.75% as of midday to stand at $29.47, returning some Friday’s more than 5.0% rally in the stock. It looks like one strategist initiated a 9,000-lot Dec. $23/$28 put spread, the largest blocks printing 7,622 contracts in the first 30 minutes of the trading week, for a net premium outlay of $1.08 apiece. Profits kick in on the position should shares in Oracle Corp. decline 8.7% to breach the breakeven price of $26.92, while maximum possible profits of $3.92 per contract are available should the stock drop 22.0% to $23.00 by December expiration. The put spread is the largest trade in Oracle options so far today. The transaction could be a hedge to…