Your intraday options trading update.
International Business Machines Corp. (NYSE: IBM) — Bulls positioning for shares in IBM to extend gains flocked to the options market today, populating Weekly as well as longer-dated expiries with signs of optimism. Shares in the computer-services company increased as much as 3.35% during the session to secure an intraday- and new all-time high of $167.72. The stock jumped after a number of analysts raised their share price targets in the aftermath of IBM’s analyst meeting on Tuesday. Investors expecting the uptrend to continue at least through the end of this week purchased the IBM Weekly March 165 and 170 Calls, and sold nearly 2,000 of the IBM Weekly March 165 Puts set to expire this Friday. Bullish sentiment spread to the March contract call options set to expire on the 18th of this month, with investors buying around 2,000 of the in-the-money IBM March 165 Calls for an average premium of $2.60 each. Call volume is greatest at the higher March $170 strike where more than 9,950 contracts changed hands on open interest of 5,480 contracts. It looks like the majority of the calls were purchased for an average premium of 62 cents apiece. Investors long the higher-strike calls are poised to profit should shares in IBM rally another 1.7% to surpass the average breakeven price of $170.62 by expiration day. IBM is scheduled to report first-quarter earnings after the market close on April 18.
Catalyst Health Solutions, Inc. ( NASDAQ: CHSI) — Options on the full-service pharmacy benefit management (PBM) company are active today on news it agreed to purchase the PBM division of Walgreen Company (NYSE: WAG) for $525 million. Shares in Catalyst Health jumped 18.3% during the session to hit an intraday and all-time high of $52.69. One options player appears to have nearly doubled his money in the span of three weeks by taking profits on a bullish stance initiated back on February 16, when shares in CHSI closed at $45.65. It looks like the investor originally purchased 337 in-the-money CHSI June 45 Calls for $4.10 each, and today sold them for $8.00 a-pop. Overall, investors traded more than 2,370 options on Catalyst Health during the first half of the session, with roughly equal numbers of call and put options.
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TCF Financial Corp. (NYSE: TCB) — Shares in the financial services firm dropped 3.4% in early-afternoon trade to an intraday low of $15.66 after the firm said it is offering $200 million of its common stock. Near-term options activity on the stock suggests some investors are positioning for the price of the underlying to give up more ground ahead of March expiration. More than 5,250 TCB March 15 Puts traded today versus open interest of just 360 contracts. The overwhelming majority of the puts appear to have been purchased for an average premium of 17 cents each. Bears holding the put options are prepared to make money should shares in TCB fall another 5.3% off today’s low of $15.66 to breach the average breakeven point to the downside at $14.83 by March expiration day. Implied volatility on the stock is up 8.6% to stand at 36.42% as of 1:45 pm in New York.
Brunswick Corp. (NYSE: BC) — Bullish signs in Brunswick Corp. options caught our eye today with shares in the global manufacturer and marketer of boats and billiards tables trading .70% higher on the session at $24.37 just before 12:15 pm in New York. Approximately 3,600 BC June 21 Puts traded on paltry previously existing open interest of just 345 contracts at that strike. It looks like around 2,500 of the puts were sold at a premium of $1 apiece. Put sellers keep the full premium pocketed on the trade as long as shares in the largest publicly traded boat manufacturer exceed $21.00 through expiration day in June. Brunswick Corp. reports first-quarter earnings ahead of the opening bell on April 28, well in advance of that expiration.
Andrew Wilkinson is senior market analyst with Interactive Brokers, the professional’s gateway to the world’s markets.