Options Update: Cemex S.A.B. de C.V. (CX) & Avis Budget Group, Inc. (CAR)
CX ñ Cemex S.A.B. de C.V.
Ready-mix concrete producer, Cemex, experienced a 2% decline in shares today to $11.54. Despite the dip in shares, it looks like one investor is taking profits on an position established about a week ago, and is rolling the bullish stance to a higher strike price in the December contract. It appears the trader originally purchase 5,927 calls at the December 11 strike for about 70 cents premium apiece on November 2, 2009. The investor sold the calls today for 1.25 apiece, earning net profits of 55 cents per contract. Next, the cement-bull bought 5,927 calls at the higher December 12 strike by paying out 80 cents premium apiece. Additional profits on the new long-call position will accumulate if shares of CX rally 11% to $12.80 by expiration.
CAR ñ Avis Budget Group, Inc.
The 1% decline in shares of the rental car company today to $10.36 may have prompted one investor to take profits by selling in-the-money call options. The trader likely purchased approximately 5,300 calls for an average premium of 50 cents at the now in-the-money November 10 strike, back on November 2, 2009. Today the investor sold 5,300 calls at the same strike for 1.05 apiece. Perhaps the trader is taking what profits he can in case shares of CAR continue to decline ahead of expiration day in less than two weeks. Net profits on the closing sale amount to 55 cents per contract.
Plain-vanilla put buying in the December contract adds to bearish sentiment on Avis today. It looks like 1,000 put options were picked up at the December 10 strike for an average premium of 1.00 apiece. Additional pessimism on CAR took the form of a stop-loss strategy. An investor possibly sold shares short on the underlying stock, spread against the purchase of 7,900 calls at the out-of-the-money December 12.5 strike, for 65 cents each. This individual is likely similarly throwing in the towel on Avis. The long call position acts to limit losses in case shares actually rally higher ahead of expiration in December.
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