Options Intelligence Report: People's United Financial, Inc. (PBCT), Energy Select Sector SPDR ETF (XLE) & Fastenal Company (FAST)
Stampede Of Bulls At S&L firm Peopleís United Financial following B of A guidance
PBCT ñ Peopleís United Financial, Inc.
Savings and loan holding company, Peopleís United Financial, attracted hoards of bullish options players today after Bank of America Corp. initiated the firm with a ëneutralí rating and a target share price of $16.50. The Connecticut-based lenderís 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 PBCTís 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.
XLE ñ Energy Select Sector SPDR ETF
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.
FAST ñ Fastenal Company
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. FASTís 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 Fastenalís 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.
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