Bulls Buying Call Options Amid Visa Rally

By and Jun 17, 2010, 1:58 PM Author's Blog  

V – Visa, Inc. – Shares of the global payments technology company are up 0.75% to $77.76 just before 1:40 pm (ET), but earlier in the session rallied as much as 2.5% to an intraday high of $79.13. The bullish movement in the price of the underlying shares inspired near-term optimists to take action. Investors purchased approximately 4,400 calls at the June $80 strike for an average premium of $0.33 apiece. Call buyers at this strike price lose the entire premium paid for the calls if they land out-of-the-money tomorrow. But, investors long the calls are poised to profit if shares of the credit card company rally through the average breakeven price of $80.33 ahead of June expiration. Bullish individuals populated the July $80 strike where 1,200 call options were purchased at an average premium of $2.37 apiece. Options traders long the July $80 strike calls make money if, by July expiration, shares increase 5.9% over the current price of $77.76 to exceed the effective breakeven point at $82.37. Finally, uber-bulls bought roughly 1,700 calls at the higher July $85 strike for an average premium of $0.84 a-pop. Higher-strike call coveters profit only if Visa’s shares surge 10.4% to trade above the breakeven price of $85.84 by expiration day next month.

  • SHARE:
  • Share on StockTwits

LEAVE A COMMENT

SPY200.265  chart-0.445  chart -0.22%
GOOG575.69  chart+4.09  chart +0.72%
AAPL103.14  chart+0.64  chart +0.62%
TSLA282.95  chart+13.25  chart +4.91%
BBRY10.43  chart+0.25  chart +2.46%
NFLX476.2719  chart-1.3681  chart -0.29%
FB75.9499  chart+1.1299  chart +1.51%

Nikkei15668.6  chart+192  chart +1.24%
Shanghai2266.046  chart+30.535  chart +0.00%
UK6829.17  chart+3.86  chart +0.06%
France4378.33  chart-1.40  chart -0.03%
Germany9507.02  chart+27.989  chart +0.30%