LO – Lorillard Inc. – The largest U.S. manufacturer of menthol cigarettes popped up on our ‘hot by options volume’ market scanner in the first half of the trading day after investors initiated near-term bearish strategies on the stock. Lorillard’s shares are currently down 0.35% at $74.38 as of 11:40 am (ET). Options players expecting further bearish movement in the price of LO’s shares picked up approximately 3,500 puts at the July $72.5 strike for an average premium of $0.23 per contract. Investors long the puts make money if shares fall another 2.8% to breach the average breakeven price at $72.27 by expiration on Friday.
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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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