Vodafone Weeklys Generate Big Profits For Some Traders As Shares Soar
by Option Review - August 29th, 2013 2:15 pm
Today’s tickers: VOD, TFM & WSM
VOD – Vodafone Group Plc – Short term bullish positions initiated on Vodafone last week are generating substantial gains for some options traders today, with shares in the name up as much as 9.2% today to $32.12 after the U.K. carrier confirmed it is in talks to sell its 45% stake in Verizon Wireless to Verizon Communications Inc. Buyers of VOD weekly call options last Thursday saw a big jump in the value of their contracts overnight. Open interest in contracts that expire at the end of this week is greatest in the Aug 30 ’13 $29.5 and $30 calls, with 344 and 353 open contracts, respectively. A review of time and sales data in the $29.5 strike calls indicates one strategist purchased more than 300 contracts on August 22nd for a premium of $0.50 each. The jump in Vodafone’s shares today has roughly quadrupled the value of the $29.5 strike calls versus this time last week to $2.40 per contract as of 11:45 a.m. ET. Similarly, time and sales data suggests most of the Aug 30 ’13 $30 calls were purchased last Friday at a premium of $0.35 per contract. Premium required to purchase the $30 calls today has more than tripled in value to $1.90 each as of the time of this writing. Overall options volume on Vodafone is running well above the average daily level this morning, with 32,400 contracts traded thus far in the session versus an average of 8,900 options. Trading in VOD calls is outpacing that of puts, with the call/put ratio hovering around 3.2 as of 11:45 a.m. in New York.
TFM – Fresh Market, Inc. – Shares in Fresh Market fell as much as 10% today to…
Sprint Straddle Implies Limited Movement through November for Shares
by Option Review - September 8th, 2009 4:22 pm
Today’s tickers: S, VOD, ENER, KFT, FDX, HNT & FXI
S - A sold straddle in the November contract on Sprint today suggests that at least one investor is hoping to see shares settle at $4.00 when options expire in just over two months. The stock has surrendered 1.5% of its value to stand at the current price of $3.75. The short straddle was established at the November 4.0 strike through the sale of 10,000 calls for 40 cents apiece and the sale of 10,000 puts for 60 cents apiece. The gross premium pocketed by the investor amounts to one dollar per contract and is retained in full as long as shares rise to $4.00. The short call and put positions will result in losses for the straddle-seller if shares of Sprint surpass the breakeven point to the upside at $5.00, or if the stock falls beneath the breakeven point to the downside at $3.00, by expiration in November. – Sprint Nextel Corp. –
VOD - The telecommunications company appeared on our ‘hot by options volume’ market scanner after investors used put options to get bullish on the stock in the January contract. VOD received an upgrade to ‘buy’ from ‘hold’ at Investec, which perhaps spurred the more than 2.5% rally in shares during the trading session to $22.66. Traders expecting continued upward momentum in the stock were seen selling approximately 5,300 puts short at the January 22.5 strike price for an average premium of 1.72 apiece. Investors will retain the full amount of premium received if shares of VOD remain higher than $22.50 through expiration. Individuals short the put options bear the risk of having shares of the underlying put to them at an effective price of $20.78. Shares of VOD would be put to the traders if the put options land in-the-money with shares trading beneath $22.50. – Vodafone Group PLC –
ENER - Shares of the energy firm have surged more than 21% during the session to $12.64 prompting bullish call buying action in the front month. Some investors targeted the now in-the-money September 11 strike where 4,000 calls were picked up for an average premium of 61 cents each. Traders holding these call options have already begun to accumulate profits of approximately 1.03 because shares are currently trading above the effective breakeven point on the transaction at $11.61. Nearly 6,000 calls were coveted at the higher September 12.5…