Options Intelligence Report: ConAgra (CAG) & New York Community Bancorp (NYB)
ConAgra call option seller banks gains
CAG ñ ConAgra Foods, Inc. ñ The food company responsible for such brands as Chef Boyardee, Hebrew National, and more, attracted bullish option players today. Shares rose slightly by 0.05% to $22.61.
One trader banked gains on a previously established long call position. It appears the investor originally purchased 5,400 calls at the December 22.5 strike for 15 cents apiece back on November 4, 2009, when shares were at $20.89. Today the trader sold all 5,400 calls for an average premium of 37 cents per contract to secure net profits of 22 cents per contract.
The same investor ramped up optimism on the stock by initiating a new long call position in the March 2010 contract. The trader purchased 5,400 calls at the higher March 25 strike for 25 cents premium apiece. The optimistic investor breaks even on the new position if shares rally 12% from the current price to surpass the breakeven point at $25.25 by expiration in March 2010.
ADVERTISEMENTS (ARTICLE CONTINUES BELOW)
New York Community Bancorp
NYB ñ New York Community Bancorp ñ News last week that this 212-branch community lender would take on the seized assets of AmTrust Bank saw its shares jump 10%. Lucky investors were treated to a further 8.5% on Monday to $13.40 as the bank said it would finance the takeover with the sale of 60 million shares.
While the medium-term outlook maybe pretty bullish since it will expand by more than one third its number of accounts at a stroke, near term bears spent an average of 19 cents to lock into protective put option plays that would compensate them in the event that shares suffered a hiccup before options expire in two weeks time. Elsewhere happy banking bulls were keen to buy calls expiring in January at the 12.5, 14 and 15 strikes indicating that a successful takeover at AmTrust will attract more investors in the coming months.
Note: The material presented in this commentary is provided forinformational purposes only and is based upon information that isconsidered to be reliable. However, neither Interactive Brokers LLC norits affiliates warrant its completeness, accuracy or adequacy and itshould not be relied upon as such. Neither IB nor its affiliates areresponsible for any errors or omissions or for results obtained fromthe use of this information. Past performance is not necessarilyindicative of future results.
This material is not intended as an offer or solicitation for thepurchase or sale of any security or other financial instrument.Securities or other financial instruments mentioned in this materialare not suitable for all investors. Any opinions expressed herein aregiven in good faith, are subject to change without notice, and are onlycorrect as of the stated date of their issue. The information containedherein does not constitute advice on the tax consequences of making anyparticular investment decision. This material does not take intoaccount your particular investment objectives, financial situations orneeds and is not intended as a recommendation to you of any particularsecurities, financial instruments or strategies. Before investing, youshould consider whether it is suitable for your particularcircumstances and, as necessary, seek professional advice.
View Andrew Wilkinson's post archive >