IB Options Brief: Barclays PLC (BCS) & Safeway, Inc. (SWY)
BCS ñ Barclays PLC
Put options on Barclays are more active than usual, with shares in the financial services provider sliding 4.1% to $13.74 by midday in New York. The stock joined in on the broad market decline, pulling back on European concerns, Chinaís GDP reading and U.S. consumer confidence data, to snap the three-day rally in equities.
The heaviest action in BCS options is in the May $13 strike put, where 4,000 contracts changed hands against open interest of 182 open positions. It looks like one trader paid $0.50 per contract to position for shares in the name to extend losses in the near term. Profits are available to the downside should shares in Barclays decline another 9.0% to breach the effective breakeven price of $12.50 by expiration.
The financial services provider is scheduled to report first-quarter earnings ahead of the opening bell on April 26th. Shares in financial giants, JPMorgan and Wells Fargo, are down more than 2.0% today in the aftermath of their earnings reports.
SWY ñ Safeway, Inc.
Call buying on grocery operator, Safeway, Inc., commenced straight out of the gate this morning as shares in the name continued higher on buyout speculation. Shares in Safeway are up 3.7% at $21.44 this afternoon, after earlier rising as much as 4.9% to $21.68 intraday, and on the heels of a 10.0% rally during the past week.
Options volume in Safeway is heaviest in the front month, with more than 6,900 calls in play at the April $22 strike against open interest of 1,534 open positions. It appears the majority of the contracts were purchased for an average premium of $0.22 apiece in the first 10 minutes of the trading session. Premium required to buy the $22 strike calls has doubled intraday to $0.45 per contract as of 12:45 p.m. in New York trade.
Call buyers profit at expiration next week as long as shares in Safeway rally another 3.6% to top the average breakeven price of $22.22. Safewayís shares last traded above $22.22 back on March 19th. The food and drug retailer is scheduled to report first-quarter earnings ahead of the open on April 26th, the week after April options expire.
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