INTU – Intuit Inc. – The provider of business and financial management solutions popped up on our ‘hot by options volume’ market scanner late in the trading session after one options strategist initiated a bearish transaction in the October contract. Intuit’s shares are down slightly by 0.15% to stand at $39.50 as of 3:15 pm ET. It looks like the trader bought a plain-vanilla debit put spread, buying 6,346 puts at the October $37.5 strike for a premium of $1.08 each, and selling the same number of puts at the lower October $34 strike for premium of $0.36 apiece. The net cost of establishing the spread amounts to $0.72 per contract. Intuit’s shares must decline 6.9% from the current price in order for the investor to breakeven on the trade at a share price of $36.78. The put spreader may walk away with maximum potential profits of $2.78 per contract if Intuit’s shares tumble more than 13.9% lower to trade below $34.00 by October expiration. The overall reading of options implied volatility on INTU is higher by 5.8% to stand at 26.03% in the final hour of the trading session.
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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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