People's United Financial, Inc. (PBCT) –
Savings and loan holding company, People's United Financial, attracted
hoards of bullish options players today after Bank of America Corp.
initiated the firm with a ‘neutral' rating and a target share price of
$16.50. The Connecticut-based lender's shares increased 1.3% during the
trading day to stand up at $16.38 as of 2:25 pm (ET). Investors
anticipating continued upward movement in the price of the underlying
shares paid an average premium of $0.40 per contract to take ownership
of at least 7,400 call options at the August $17.5 strike price.
Call-buyers make money if PBCT's share price increases 9.3% over the
current value of $16.38 to exceed the average breakeven point to the
upside at $17.90 by August expiration day.
Energy Select Sector SPDR ETF (XLE) –
Shares of the XLE, an exchange-traded fund that corresponds to the
price and yield performance of the Energy Select Sector of the S&P
500 Index, are up 0.30% to $59.17 with 90 minutes remaining the trading
day. Optimistic options traders initiated bullish positions on the fund
by purchasing call options in the May contract. Similar call-buying
activity at the same strike price in the May contract was also observed
during the past couple of sessions. Investors picked up approximately
11,000 calls at the May $62 strike for an average premium of $0.49
apiece. Call-buyers are prepared to profit if shares of the underlying
fund surge at least 5.6% from the current price to surpass the
breakeven price of $62.49 ahead of expiration day next month. We note
that shares of the energy fund have not breached $62.49 since October
1, 2008, when the XLE traded up to an intraday high of $63.43.
Fastenal Company (FAST) –
Options activity on the seller of industrial and construction supplies
this afternoon indicates one investor has established a long-term
optimistic stance on the stock. FAST's shares are trading 1.3% lower to
$51.05 in late afternoon trading. The investor responsible for nearly
all of the current options volume traded on stock during the session
purchased 8,850 puts at the January 2012 $50 strike for a premium of
$8.10 each in combination with the purchase of an equivalent number of
shares of the underlying stock. The trader is hoping to see shares
appreciate, but has shelled out extra premium to protect the value of
the underlying position should Fastenal's share price plummet in the
next year and eight months to expiration. Downside protection kicks in
if shares drop more than 17.9% from the current price to breach the
lower breakeven point on the puts at $41.90 by expiration day in
January 2012.
MGM Mirage, Inc. (MGM) –
Frenzied call buying ensued on the operator of casino resorts today
amid a more than 12.5% rally in the price of the underlying shares to a
new 52-week high of $15.02. Optimism on the gaming sector and MGM is
perhaps partly inspired by news that Nevada statewide gambling revenue
increased 13.92% in the month of February. Regardless of the impetus
for bullish sentiment, bull sharks picked up the scent of blood in the
water and attacked calls across multiple contracts. Near-term bullish
positioning took place at the April $15 strike where at least 6,100
calls were purchased for an average premium of $0.35 apiece. Buying
interest continued at the higher April $16 strike as more than 4,100
calls were coveted for an average premium of $0.15 each.