Monster Worldwide, Inc. (MWW)– Shares
in the online employment solutions provider are off to the races today,
rallying nearly 20.0% this morning to $7.78 after the Company's CEO
said it is looking at strategic alternatives to increase shareholder
value. The positive comments spurred a rush into Monster Worldwide
options, with front month calls seeing most of the action. Trading
traffic is heaviest at the Mar. $8.0 strike where more than 9,600 calls
have changed hands against open interest of just 838 contracts.
Strategists speculating the bullish move in Monster's shares is likely
to continue in the near term, appear to have purchased the majority of
the $8.0 strike calls for an average premium of $0.30 each. Call buyers
may profit at expiration as long as MWW's shares rally another 8.5% over
the current traded price of $7.65 to exceed the average breakeven point
at $8.30. Bullish positioning spread to the April expiry calls, as
well, with around 1,000 contracts purchased at the $9.0 strike for a
premium of $0.20 a-pop. Traders long these contracts stand ready to
profit at expiration next month in the event that Monster Worldwide's
shares surge 20.3% to top the effective breakeven price of $9.20. Shares
in MWW last traded above $9.20 back in November, having at that point
erased nearly half of its value based on the April 2011 52-week high of
$17.73. The stock closed Wednesday at $6.94, down 60.0% off the April
high.
Toronto-Dominion Bank (TD)– A
large spread in Toronto-Dominion Bank put options may be read as a sign
of caution on the financial services provider despite the release of
better-than-expected first-quarter earnings ahead of the opening bell
this morning. It looks like one investor purchased a put spread that
yields maximum possible profits if the shares sustain double-digit
declines over the next seven weeks to expiration. Shares in TD Bank are
currently up 2.4% on the morning's earnings beat and announced boost in
dividend to stand at $83.45 as of 12:20 p.m. in New York. The put player
appears to have purchased 7,827 puts at the April $80 strike, selling
the same number of puts at the lower April $70 strike, for a net premium
outlay of $0.90 per contract. The transaction may represent an outright
bearish bet that shares are likely to pullback in the near term, or a
protective spread to hedge a long position in the underlying stock.
Shares in the name have rallied an impressive 20.0% in the most recent
three month period. Perhaps the spread represents an insurance policy on
those gains in case the stock should falter. The investor responsible
for the transaction starts to make money – or realize downside
protection – if shares in TD Bank decline 5.2% to breach the effective
breakeven price of $79.10, with maximum potential profits of $9.10 per
contract available on the strategy in the event of a more than 16.2%
pullback in the shares to $70.00 or below by April expiration.
Canada Pacific Railway Ltd. (CP)– Shares
in the provider of rail freight transportation services rose 2.1% to
$76.31 today, joining Canadian equities in rallying on the back of
strong earnings reports and dividend increases from the country's two
largest lenders. Options activity on Canada Pacific Railway this morning
suggests at least one strategist is positioning for the shares to
extend gains and rally to fresh multi-year highs by June expiration.
Trading traffic in CP options is heaviest out at the June $75 strike,
where more than 3,900 in-the-money calls changed hands against open
interest of 2,621 positions. It looks like the majority of the call
options were purchased for an average premium of $4.67 apiece. Call
buyers may profit if shares in Canada Pacific Railway climb 4.4% to
trade above the average breakeven price of $79.67 by June expiration.
Shares in CP last traded above $79.67 back in July 2007.