IB Options Brief: Ann, Inc. (ANN) & Cracker Barrel Old Country Store, Inc. (CBRL)
ANN – Ann, Inc.
Upside calls on women’s apparel and accessories retailer, Ann, Inc., attracted buyers positioning for shares in the name to rally through the end of the trading week. Interestingly, shares in ANN started the session flat-to-slightly negative on Wednesday before turning positive and rallying sharply. The move in the price of the underlying was accompanied by heavy front-month call buying. The stock is now up better than 2.4% on the session to stand at $38.40 as of 12:45 p.m. in New York.
The bulk of the trading traffic in ANN options this morning is in the Sep. $38 strike where more than 3,600 in-the-money calls have changed hands versus open interest of 399 contracts. Time and sales on the trades indicates more than 3,500 of the call options were purchased just after 11:10 a.m. this morning for an average premium of $0.25 apiece. Less than two hours later the price tag on the $38 calls has tripled to $0.75 per contract.
CBRL – Cracker Barrel Old Country Store, Inc.
Shares in the operator of restaurants and gift shops in the U.S. jumped 9% to an all-time high of $69.30 this morning after the company reported fourth-quarter earnings and sales that handily beat analyst expectations. The sharp move to the upside in the shares today sparked heavier-than-usual trading traffic in CBRL options. It looks like some traders are positioning for shares in the name to extend gains in the near term.
Strategists anticipating fresh record highs by this weekend snapped up more than 730 of the Sep. $70 strike call for an average premium of $1.50 apiece today. Buyers of the $70 calls may profit at expiration in the event Cracker Barrel’s shares add 3% to today’s high of $69.30 and settle above the average breakeven price of $71.50.
Meanwhile, traders preparing for the stock to potentially stage a more impressive rally during the next four weeks looked to the Oct. $75 strike, purchasing around 145 of the contracts for an average premium of $0.17 apiece. The stock would need to gain 8.5% by October expiration in order for $75 strike call buyers to make money above the average breakeven price of $75.17.
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