Options Intelligence Report: Williams-Sonoma, Inc. (WSM), Citrix Systems, Inc. (CTXS) & Fifth Third Bancorp. (FITB)
WSM ñ Williams-Sonoma, Inc.
Unconfirmed takeover rumors swirling about the specialty retailer of home goods fanned the fire under Williams-Sonomaís shares this morning, sending the stock up as much as 8.2% in early morning trading to a new 52-week high of $31.20. Options players looking to benefit from near-term share price appreciation piled into call options in the May contract. Investors picked up 3,600 now in-the-money calls at the May $30 strike for an average premium of $1.25 apiece. Early-morning movers make money if shares of the underlying stock rally above the average breakeven point on the calls at $31.25 ahead of May expiration day. Call-buyers could decide to bank intraday gains by selling the contracts because of the more than 160% increase in premium on the May $30 strike calls, which now tote an asking price of $1.85 each. Buying interest spread to the higher May $35 strike where bullish players purchased more than 4,200 call options for an average premium of $0.19 apiece. Premium on the higher strike call contracts has risen 500% during the session, and late-comers to the feeding frenzy must now shell out $0.34 in premium to purchase the May $35 strike calls. Takeover chatter and increased demand for options on Williams-Sonoma boosted the stockís overall reading of options implied volatility 12.6% to 39.40% as of 11:00 am (ET).
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CTXS ñ Citrix Systems, Inc.
Near-term put options are in demand this morning as investors await Citrix Systemsí first-quarter earnings report scheduled for release after the closing bell this afternoon. Shares of the provider of virtualization, networking and cloud computing solutions are currently trading 0.15% higher on the day at $49.52, which is a scant $0.06 below the current 52-week high on the stock of $49.58, attained during Tuesdayís trading session. Investors hedging against an earnings disappointment picked up 3,800 put options at the May $45 strike for an average premium of $0.60 apiece. Put buyers are perhaps building up relatively cheap downside protection on long underlying stock positions in case Citrix Systemsí first-quarter report fails to impress. Alternatively, buying interest in the put options may be outright bearish bets that Citrix shares will decline following earnings. In this scenario, investors long the put options make money if shares plummet more than 10.33% to breach the average breakeven price of $44.40 by May expiration.
FITB ñ Fifth Third Bancorp.
Shares of the bank holding company rallied 2.5% to a new 52-week high of $15.17 this morning after the firmís CEO and chairman, Kevin Kabat, told shareholders at FITBís annual meeting that the company is ìpositioned to emerge as one of the best-performing regional banks.î Options investors reacted to the positive statement by picking up call options on the stock. More than 3,100 calls were scooped up at the May $16 strike for an average premium of $0.57 per contract. Investors long the calls make money if Fifth Thirdís shares increase 9.2% over the current price to surpass the effective breakeven point to the upside at $16.57 by May expiration. Options implied volatility on Fifth Third Bancorp is up 11.7% to 46.16% as of 11:25 am (ET).
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