IB Options Brief: Foot Locker, Inc. (FL) & JPMorgan Chase & Co. (JPM)

Posted March 2nd, 2012 by Caitlin Duffy in Unusual Activity

FL ñ Foot Locker, Inc.
Options on athletic footwear and apparel retailer, Foot Locker, Inc., are more active than usual this morning following the release of better-than-expected fourth-quarter earnings after the bell on Thursday. Shares in the New York, New York-based Company rallied earlier in the session, but slipped into negative territory to trade 1.1% lower on the day at $29.10 as of 11:30 a.m. on the East Coast. The stock trades at its highest level in at least five years, up 20.0 % year-to-date and roughly 75.0% off the August 8, 2011, 52-week low of $16.66.

Activity in March expiry call options today suggests some strategists are positioning for shares to extend gains in the next couple of weeks. Options volume is most concentrated at the Mar. $30 strike, where more than 4,700 calls changed hands against 1,173 contracts. It looks like most of the call options were purchased for an average premium of $0.63 apiece. Traders long the calls stand prepared to profit at expiration in the event that Foot Lockerís shares rally 5.25% over the current price of $29.10 to surpass the average breakeven point at $30.63.

JPM ñ JPMorgan Chase & Co.
Shares in JPMorgan had a good week, rising some 6.6% following the Companyís annual investor day. The stock trades up 0.55% at $40.59 in early-afternoon trade, and it looks like some strategists dabbling in short-term option contracts on the name are positioning for an encore performance next week.

Traders snapped up some 1,400 calls at the Mar. $41 strike this morning for an average premium of $0.36 each, and picked up another 2,300 call options at the higher Mar. $42 strike at an average premium of $0.13 apiece. Bullish positioning in the weekly contracts may pay off at expiration as long as JPMís shares rally another 1.9% and 3.8% to settle above the average breakeven prices of $41.36 and $42.13, respectively.

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