EMC – EMC Corp. – One bullish options investor expecting EMC Corp.’s shares to attain a new 52-week high by August expiration initiated a buy-write strategy on the stock in the first half of the trading session. EMC’s shares are currently trading 0.05% higher on the day at $19.25 just before 12:30 pm (ET). The covered-call player appears to have sold 1,500 calls at the August $21 strike for a premium of $0.31 apiece in conjunction with the purchase of shares of the underlying stock, which were trading at an average price of $19.21 at the time of the transaction. The sale of the call options effectively reduces the cost of buying EMC Corp. shares to an average price of $18.90 each. The buy-write strategist is therefore positioned to enjoy maximum gains of 11.1% if EMC’s shares rally above $21.00 by August expiration. In contrast to the bullish activity in the August contract, another options player threw in the towel on EMC Corp. by selling 3,500 calls at the July $21 strike for an average premium of $0.08 each. The call seller apparently does not believe the firm’s shares are set to rally 9% to surpass to $21.00 ahead of July expiration.
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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