TXT – Textron Inc. – Near-term call options on Textron are flying off the shelves today with shares of the underlying stock trading up nearly 7.85% at times to attain an intraday high of $21.05. Textron’s shares are currently up 7.05% to stand at $20.90 as of 12:20 pm (ET). Investors anticipating continued share price appreciation through expiration next month scooped up in- and out-of-the-money call options in the June contract. Bullish players purchased 1,200 in-the-money calls at the June $19 strike for an average premium of $1.86 apiece, and picked up another 1,000 in-the-money contracts at the higher June $20 strike for an average premium of $1.39 a-pop. Buying interest spread to the June $21 strike where 1,700 call options were coveted at an average premium of $0.82 each. Trading traffic in calls is heaviest at the June $22 strike where 3,300 calls out of total volume of 6,142 contracts were purchased at an average premium of $0.54 apiece. Investors long the June $22 strike calls make money if Textron’s shares rally another 7.85% over the current value of $20.90 to exceed the average breakeven price to the upside at $22.54. Finally, investors paid an average premium of $0.30 per contract to purchase 1,100 calls at the higher June $23 strike. The overall reading of options implied volatility on Textron is down 13.8% at 52.68% just ahead of 12:30 pm (ET).
Affiliation: Interactive Brokers
Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.
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