The Proctor & Gamble Co. (PG) –
Bullish action on Proctor & Gamble today suggests one investor
expects shares to continue to rally ahead of expiration in November. Shares are
currently trading 1% higher to $61.13. The trader purchased 10,000 calls at the
now in-the-money November 60 strike for 1.39 each, and simultaneously sold
10,000 calls at the higher November 62.5 strike for 26 cents apiece. The net
cost of buying the call spread amounts to 1.13 per contract and yields maximum
potential profits of 1.37 each if shares rally up to $62.50 by expiration.
Shares need only rally another 2.2% from the current price to reach the
$62.50-level.
Citrix Systems, Inc. (CTXS) –
Software developer, Citrix Systems, attracted bullish option traders to
the November contract today amid a 1% increase in shares to $38.80. Investors
displayed optimistic sentiment on the stock by selling approximately 10,600 puts
at the November 35 strike for 10 cents premium apiece. Put-sellers retain the
full dime-per-contract as long as shares remain above $35.00 through expiration
this month. Shares of CTXS have traded above $36.00 since September 4, 2009.
Liberty Media Corp. (LINTA) –
Shares of the broadcasting and entertainment company rallied 1% during
the trading session to $12.14. Plain-vanilla call buying action on the stock
today suggests some investors expect shares to rise significantly by expiration
in January 2010. Traders purchased about 11,800 calls at the January 15 strike
for an average premium of 25 cents apiece. Call-buyers will accumulate profits
if shares surge at least 26% from the current price to surpass the breakeven
point at $15.25 by expiration.
Hartford Financial Services
Group, Inc. (HIG) – Medium-term investors placed bearish bets on the
insurance and financial services firm today. Shares are currently trading less
than 0.25% higher to $24.16 after suffering significant erosion throughout the
week. One pessimistic trader initiated a bearish risk reversal in the January
2010 contract. The investor sold 4,500 calls at the January 27 strike for an
average premium of 78 cents apiece to partially finance the purchase of the same
number of put options at the lower January 21 strike for 1.68 each. The net cost
of the transaction is reduced to a more palatable 90 cents per contract, but
does leave the investor exposed in the event of a rally of more than 11.7% by
expiration in January. The HIG-bear may profit by expiration if shares decline
17% from the current price to breach the breakeven point at $20.10.
CVS Caremark Corp.
