SWY – Safeway, Inc. – Bullish players dominated options trading activity on the North American food and drug retailer today with shares of the underlying stock enjoying a 0.60% rally in the final hours of the session to stand at $21.43 just before 2:50 pm (ET). Investors expecting Safeway’s share price to exceed $20.00 each through July expiration sold 5,700 puts at the July $20 strike to pocket premium of $0.40 per contract. Put sellers keep the full premium received on the transaction as long as the put options fail to land in-the-money at expiration. Investors short the puts are obliged to have shares of the underlying stock put to them at an effective price of $19.60 each in the event that the July $20 strike puts land in-the-money. Safeway’s shares must decline 8.5% from the current price of $21.43 before put sellers incur losses beneath the breakeven price of $19.60.
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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