Walgreen Co. (WAG) – Shares
in the largest U.S. drugstore chain may rally sharply heading into the
New Year, according to one options player dabbling in Jan. 2012 contract
call options this morning. The buyer of a sizable bull call spread may
be using the position to prepare for Walgreen's shares to pop after the
company reports first-quarter earnings ahead of the opening bell on
December 21. The stock currently trades flat on the session at $34.01 as
of 11:45 AM in New York. It looks like the trader purchased a
roughly-3,000 lot Jan. 2012 $35/$39 call spread for an average net
premium of $1.06 per contract. The investor stands ready to profit at
expiration next year as long as shares in Walgreen Co. increase 6.0% to
exceed the average breakeven price of $36.06. Maximum potential profits
of $ are available to the call-spreader if the drug retailer's shares
soar 14.7% to trade above $39.00 at expiration in January. Walgreen's
shares last traded above $39.00 at the beginning of August.
[Related -Walgreen Co. (WAG) Dividend Stock Analysis]
ION Geophysical Corp. (IO) – The
provider of seismic solutions and equipment to the global energy
industry rallied in sympathy with shares in Mitcham Industries (MIND),
which jumped to a new 52-week high today after reporting
better-than-expected third-quarter earnings after the close on Tuesday.
ION's shares are up 1.8% to stand at $6.82 as of 12:20 PM in New York.
At least one options trader is taking advantage of the positive day for
ION's shares by picking up bearish put options on the cheap. It looks
like the investor purchased more than 3,000 puts at the Dec. $6.0 strike
for a premium of $0.10 each. These same options would have cost the
trader $0.50 each less than one week ago. The bearish position may yield
profits to the investor in the event that ION's shares drop 13.5% to
breach the effective breakeven price of $5.90 at expiration next week.
The price of the underlying traded as low as $5.30 as recently as
November 23. The company announced on Monday it will hold a conference
call to discuss its three to five year market and business outlook the
morning of Friday, December 9.
[Related -Hertz (HTZ) Investors Hurting As Stock Tumbles On Revised Annual Forecast, ConAgra (CAG) calls active]
Hertz Global Holdings, Inc. (HTZ) – A
sizable ratio call spread on the car and truck rental company indicates
one strategist is positioning for shares in Hertz Global Holdings to
potentially post double-digit gains during the next six weeks. Shares in
the Park Ridge, New Jersey-based company slipped 0.35% to $11.93 in the
first half of the session. The bullish player appears to have parked
the ratio spread in the Jan. 2012 contract, buying 3,150 calls at the
$12.5 strike for a premium of $0.70 each, and selling 6,300 calls up at
the $17.5 strike at a premium of $0.01 apiece. Net premium paid to
initiate the spread amounts to $0.68 per contract, thus positioning the
trader to profit should shares in HTZ rally 10.5% to surpass the
effective breakeven point at $13.18. The investor may enjoy maximum
potential profits of $ in the event that the car rental company's shares
surge 46.7% to settle at $17.50 at expiration day next year.
Nabors Industries, Ltd. (NBR) – Shares
in Nabors Industries, which, as of Tuesday's close, had increased
roughly 9.0% since the end of last week, slipped into the red on
Wednesday. The stock fell 2.0% to $18.31 by 12:35 PM ET; however, call
activity on the oil equipment and services provider this morning
suggests one trader expects shares to get back on the rally-track. The
investor appears to have purchased more than 1,700 calls at the Mar.
2012 $22 strike for an average premium of $0.99 a-pop. Profits may
accumulate on the position if shares in Nabors jump 25.5% to exceed the
average breakeven price of $22.99 at expiration day next year. NBR's
shares last traded above $22.99 back on August 4.