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

SPY207.31  chart-0.19  chart -0.09%
GOOG523.40  chart+1.56  chart +0.30%
AAPL126.44  chart-0.16  chart -0.13%
TSLA280.02  chart+10.87  chart +4.04%
TWTR35.72  chart+0.32  chart +0.90%
BBRY7.96  chart-0.06  chart -0.75%
NFLX658.31  chart+2.86  chart +0.44%
FB87.285  chart+0.375  chart +0.43%

Nikkei20522.50  chart+193.18  chart +0.95%
UK6630.47  chart+109.49  chart +1.66%
France4835.56  chart+45.36  chart +0.93%
Germany11099.35  chart+154.38  chart +1.38%

EUR / USD1.1084  chart-0.0058  chart -0.52%
GBP / USD1.5610  chart-0.0104  chart -0.66%
CAD / USD0.7973  chart-0.0033  chart -0.41%
AUD / USD0.7631  chart-0.0074  chart -0.96%