NSC – Norfolk Southern Corp. – Shares of the firm engaged in the rail transportation of raw materials, intermediate products as well as finished goods in the United States slumped 4.30% lower in afternoon trading to stand at $54.36 as of 12:35 pm (ET). The decline in the price of the underlying shares inspired near-term bearish options activity on the stock. Investors wary of continued share price erosion ahead of June expiration purchased 5,100 puts at the now in-the-money June $55 strike for a premium of $1.65 per contract. Put-buyers make money if Norfolk’s shares decline another 1.85% from the current price of $54.36 to breach the effective breakeven point to the downside at $53.35 by June expiration day. Options implied volatility on the stock is soaring 17.3% higher this afternoon to stand at 38.67% by 12:40 pm (ET).
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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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