IGT – International Game Technology, Inc. – Shares of the maker of major slot games and casino network systems are higher by 3.15% to $18.90 in morning trading perhaps on news the firm signed a multi-product and systems agreement to provide its integrated games and systems solution at The Cosmopolitan, a new resort in Las Vegas, which is set to open in December 2010. Earlier this week we observed one investor enact a long-term three legged bullish options combination strategy, but today investors are employing nearer-term optimistic tactics. Bullish traders sold short at least 3,700 puts at the July $15 strike to pocket an average premium of $0.10 per contract. Investors short the puts keep the full premium received on the transaction as long as IGT’s shares exceed $15.00 by July expiration. Put sellers are apparently happy to have shares of the underlying stock put to them at an effective price of $14.90 should the put options land in-the-money at expiration. Options implied volatility is down 6.6% to 43.03% as of 11:07 am (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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