IB Options Brief: Energizer Holdings, Inc. (ENR) & Nike, Inc. (NKE)
ENR – Energizer Holdings, Inc.
Batteries and consumer products maker, Energizer Holdings, Inc., reaffirmed its fiscal 2012 earnings guidance, said fourth-quarter net income will likely top earnings from the year ago quarter and announced plans to cut payrolls and reduce costs. Shares reacted positively, rallying as much as 10.6% to an intraday high of $75.12 on Tuesday morning, sparking bullish activity in Energizer options.
Trading traffic is heaviest in the front month calls, with more than 1,100 in-the-money calls in play at the Sep. $70 strike versus open interest of 437 contracts. Time and sales data indicates early-birds quickest out of the gate this morning are seeing hefty intraday gains in the value of their positions.
It looks like most of the volume, roughly 850 Sep. $70 calls, were purchased within the first 3 minutes of the opening bell at premiums of $1.00 and $1.45 apiece. As of the time of this writing, 12:05 p.m. ET, the contracts are deep in-the-money and cost $4.80 each, a 380% increase over the $1.00 premium paid for the contracts near the open.
Upside calls are also in play at the Sep. $75 strike where more than 400 contracts were purchased for an average premium of $0.31 each in the first 30 minutes of the session. The Sep. $75 strike calls have tripled in value since this morning, but no longer trade in-the-money with the stock hovering around $74.25. Buyers of the $75 calls could lose the full amount of premium paid for the contracts at expiration if shares end the trading week below $75.00.
NKE – Nike, Inc.
Nike call options with three full trading sessions remaining until expiration are active this morning, with shares in the name up a slight 0.15% to stand at $98.11 as of midday in New York. Some traders may be placing bullish bets on the athletic apparel retailer ahead of the company’s annual meeting on Thursday.
The Sep. $100 strike call attracted the heaviest volume in the first half of the session, with more than 7,200 calls in play against open interest of 4,924 open positions. It looks like options traders purchased most of the calls for an average premium of $0.32 apiece this morning to position for a more than 2% move in the stock above the breakeven price of $100.32 by the end of the week.
Note: The material presented in this commentary is provided for informational purposes only and is based upon information that is considered to be reliable. However, neither Interactive Brokers LLC nor its affiliates warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither IB nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance is not necessarily indicative of future results.
This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument.Securities or other financial instruments mentioned in this material are not suitable for all investors. Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue. The information contained herein does not constitute advice on the tax consequences of making any particular investment decision. This material does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation to you of any particular securities, financial instruments or strategies. Before investing, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
View Caitlin Duffy's post archive >