Options Intelligence Report: Paychex, Inc. (PAYX) & LM Ericsson Telephone Co. (ERIC)
PAYX ñ Paychex, Inc.
Shares of the provider of payroll and integrated human resource and employee benefits outsourcing solutions rallied 0.70% to $32.11 during the session. The increase in the price of the underlying shares inspired demand for out-of-the-money call options in the March and April contracts.
Bullish players purchased approximately 11,800 call contracts at the March $32.5 strike for an average premium of $0.19 per contract. Investors long the calls stand ready to amass profits if PAYX shares trade above the breakeven price of $32.69 by expiration day next Friday. Optimism spread to the April $32.5 strike where 1,400 calls were picked up for an average premium of $0.66 each. The surge in options trading activity on PAYX lifted its reading of overall options implied volatility 12.6% to 22.13% today.
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ERIC ñ LM Ericsson Telephone Co.
The maker of mobile communications infrastructure equipment attracted bullish investors today amid a 3.25% rally in its share price to a new 52-week high of $11.20. Options traders honed in on call options in the July contract to position for a sharp rally in ERICís underlying share price by expiration.
Investors purchased approximately 5,000 call options at the July $12.5 strike for an average premium of $0.30 per contract. Call-buyers profit if shares increase at least 14.25% from the current value of the stock to surpass the average breakeven point at $12.80 by July expiration. Investors exchanged 6,950 options on ERIC by 12:20 pm (ET), which represent 16% of the total existing open interest on the stock of 43,376 contracts.
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.
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