IB Options Brief: Mattress Firm, Inc. (MFRM) & Suncor Energy, Inc. (SU)
MFRM ñ Mattress Firm, Inc.
Bullish bets in Mattress Firm options cropped up today despite the near 25.0% post-earnings plunge in shares of the mattress retailer to an intraday low of $26.70. Shares in Mattress Firm dropped on lower-than-anticipated first-quarter revenue and a reduced sales forecast for the second quarter, but some traders appear to be positioning for MFRMís shares to recoup losses during the second half of the year.
Near-term bulls picked up around 120 calls at the June $30 strike for an average premium of $1.11 apiece, while longer-dated Oct. $30 strike calls were purchased some 150 times at an average premium of $3.38 each. Call buyers in the front month stand ready to profit should the stock rebound above the average breakeven price of $31.11 by expiration next week. Traders long the Oct. $30 strike call make money if Mattress Firmís shares rally 13.7% over the current price of $29.36 to exceed $33.38 by October expiration.
MFRM shareholders are hurting today, but not quite as much as investors in luxury mattress provider, Tempur-Pedic (TPX). TPX shares halved in value after the company lowered its full-year earnings and sales forecasts. The company is scheduled to report second-quarter results after the final bell on July 26th.
SU ñ Suncor Energy, Inc.
Near-term bullish positioning in Suncor Energy, Inc. options is on the rise today, with shares in the Calgary, Alberta-based energy company up better than 3.8% at $28.32 as of 12:00 p.m. ET. Options on Suncor are most active at the Jun. $29 strike where more than 9,400 calls changed hands against open interest of 3,993 contracts.
It looks like the majority of the calls were purchased for an average premium of $0.35 apiece this morning, thus positioning buyers to profit should SUís shares extend gains in the near term. Traders long the calls make money should shares rally another 3.6% to surpass the average breakeven price of $29.35 by June expiration.
Strategists snapping up calls at the Jun. $29 strike on Tuesday paid an average premium of $0.19 apiece for approximately 1,400 of the contracts. The value of those positions has more than doubled overnight, with premium on the calls up at $0.48 each as of midday in New York.
Note: The material presented in this commentary is provided forinformational purposes only and is based upon information that isconsidered to be reliable. However, neither Interactive Brokers LLC norits affiliates warrant its completeness, accuracy or adequacy and itshould not be relied upon as such. Neither IB nor its affiliates areresponsible for any errors or omissions or for results obtained from theuse of this information. Past performance is not necessarily indicativeof future results.
This material is not intended as an offer or solicitation for thepurchase or sale of any security or other financial instrument.Securities or other financial instruments mentioned in this material arenot suitable for all investors. Any opinions expressed herein are givenin good faith, are subject to change without notice, and are onlycorrect as of the stated date of their issue. The information containedherein does not constitute advice on the tax consequences of making anyparticular investment decision. This material does not take into accountyour particular investment objectives, financial situations or needsand is not intended as a recommendation to you of any particularsecurities, financial instruments or strategies. Before investing, youshould consider whether it is suitable for your particular circumstancesand, as necessary, seek professional advice.
View Caitlin Duffy's post archive >