Procter & Gamble (PG) Put Options in Play Ahead of Earnings

PG – Procter & Gamble Co. – Far out of the money put options purchased on consumer products giant Procter & Gamble this morning suggests one or more traders may be establishing cheap bearish positions on the stock ahead of the company’s first-quarter earnings report prior to the opening bell on Friday. Shares in P&G are down more than 1.0% today at $78.56 as of 11:20 a.m. ET.

The most-traded options contracts on PG as measured by volume this morning are the regular Nov $65 strike puts, with around 5,000 contracts in play against open interest of 957 contracts. Time and sales data indicates most of the volume was purchased in the early going at a premium of $0.09 each. Buyers of the $65 strike puts may see the value of the contracts increase in the event that PG shares slip after earnings. The contracts are profitable at expiration next month if shares in Procter & Gamble plunge 17% from the current price to trade below the effective breakeven point at $64.91. Shares in P&G last traded below $64.91 back in August of 2012.

About Caitlin Duffy 373 Articles

Affiliation: Interactive Brokers

Caitlin Duffy joined Interactive Brokers in 2009. In her role as Equity Options Analyst, Caitlin provides daily market commentary; highlighting various options trades, trading patterns and strategies of interest. Through Interactive Broker's webinar program, Ms. Duffy presents a number of educational, options-related events describing the theoretical pricing of options, the option Greeks as well as options strategies.

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