Options Activity Alert: PBPB, RLD

RLD – RealD Inc. – Shares in the licenser of 3D and visual technologies to motion picture exhibitors are spiking today, up as much as 27% to touch $8.89, the highest level since August 26th, after the company reported a narrower than expected second-quarter loss.

Options changing hands on RealD this morning indicates some traders are positioning for shares in the name to extend gains during the next few months. The most traded contracts on RLD thus far in the session are the Feb ’14 $10 strike calls, with upwards of 790 lots in play against open interest of 302 contracts. Time and sales data suggests most of the volume was purchased at a premium of $0.50 each. Traders long the $10 calls stand ready to profit at expiration next year in the event that RealD shares rally another 18% over today’s high of $8.89 to exceed the breakeven price of $10.50.

PBPB – Potbelly Inc. – Better than expected third-quarter earnings reported by sandwich purveyor Potbelly on Tuesday pushed shares in the name up as much as 20% today to $32.57, the highest level since October 8th. The blowout earnings report is the first quarterly release from the sandwich chain since the company’s IPO six weeks prior.

Upside calls purchased on PBPB yesterday ahead of the company’s earnings release are generating sizable gains for some traders today. The Nov $30 strike calls were active on Tuesday, with a burst of trading traffic observed during the final 10 minutes of the session yesterday. It looks like much of the late-day activity was the work of one trader buying approximately 450 of the $30 calls, most at a premium of $0.55 each. The sharp rally in Potbelly shares today now finds the $30 strike call options changing hands at $1.25 per contract as of 11:15 a.m. EST.

Overall options volume on PBPB of around 2,900 contracts this morning is well above the stock’s average daily volume of close to 400 contracts. The bulk of the trading is in Potbelly calls, with the call/put ratio near 4.5 as of the time of this writing.

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.

Interactive Brokers: Interactive Brokers offers direct market access to around 80 electronic global markets from a single account. Successful traders and investors understand that superior technology and lower trading costs can result in greater returns. For 32 years we have been building direct access trading technology that delivers real advantages to professionals worldwide. With consolidated equity capital of US $4.4 billion, IB and its affiliates exceed 1,000,000 trades per day. In addition, our prudent and conservative risk policies make Interactive Brokers a safe haven for your money. Discover some of the reasons why IB, the largest independent US broker/dealer, is the professional traders' and investors' choice.

Visit: Interactive Brokers

Be the first to comment

Leave a Reply

Your email address will not be published.


*