IB Options Brief: Expedia, Inc. (EXPE) & Colgate-Palmolive Co. (CL)
EXPE ñ Expedia, Inc.
Diverse options strategies initiated on the online travel company this morning suggest some investors are positioning for Expediaís shares to recover from Fridayís post-earnings pullback. Shares in EXPE are currently up 0.80% to stand at $21.80 today, but the stock is down roughly 15.1% since the close of trading on Thursday.
Two sizable stock and option combination plays caught our eye on Expedia this morning. One of the two appears to be a long-term bullish bet that the price of the underlying will rebound ahead of January 2012 expiration.
It looks like an investor established a delta neutral position, selling 124,000 shares in Expedia at $21.90 each, selling 4,000 puts at the January 2012 $15 strike for a premium of $0.625 per contract, and buying 2,000 calls up at the January 2012 $25 strike at a premium of $1.50 apiece, on a 0.62 delta. The transaction positions the investor to make money if shares in Expedia recover by next January.
CL ñ Colgate-Palmolive Co.
Demand for Colgate-Palmolive call options jumped at the end of the previous trading week, but it looks like investor appetite for bullish positions in the consumer products manufacturer has yet to be sated. Shares in the maker of products ranging from toothpaste to pet food are currently up 0.30% to stand at $79.16 as of 11:25am in New York.
Options players speculating that shares in the name may climb substantially in the next six months traded more than 6,200 calls up at the August $90 strike on paltry previously existing open interest of just 260 contracts. The overwhelming majority of the calls appear to have been purchased for an average premium of $0.75 apiece.
Call buyers stand ready to profit should Colgateís shares surge 14.6% to exceed the average breakeven price of $90.75 by August expiration day. Shares in Colgate-Palmolive traded at an all-time high of $87.39 back on November 18, 2009, and have not exceeded $85.93 in the past 52-weeks.
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