Options Brief: Omnicare (OCR)

OCR – Omnicare, Inc. – Shares of the geriatric pharmaceutical services company fell as much as 10.10% at the start of the trading session to touch down at an intraday low of $22.14, but managed to claw their way back up, and currently stand just 1.35% lower on the day at $24.30 as of 1:10 pm ET. Omnicare’s shares dropped sharply on news its president and CEO, Joel F. Gemunder, retired. The CEO’s exit music coupled with increased demand for options on Omnicare inspired a more than 29.1% increase in the overall reading of options implied volatility on the stock to 48.64% this afternoon. The initial plunge in the price of the underlying shares fueled demand for near-term bearish put options. Traders scooped up 1,700 puts at the August $22.5 strike for an average premium of $0.84 each. Meanwhile, it looks like one trader rolled a previously established long put stance on the stock down to a lower strike price, selling 1,000 in-the-money puts at the August $25 strike for an average premium of $2.05 each, in order to buy the same number of contracts at the lower August $20 strike at an average premium of $0.33 a-pop. Options investors exchanged more than 14,600 contracts on Omnicare by 1:15 pm ET, which exceeds overall previously existing open interest on the stock of 13,347 lots.

About Andrew Wilkinson 1023 Articles

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.

Interactive Brokers: Interactive Brokers offers direct market access to around 80 electronic global markets from a single account. Successful traders and investors understand that superior technology and lower trading costs can result in greater returns. For 32 years we have been building direct access trading technology that delivers real advantages to professionals worldwide. With consolidated equity capital of US $4.4 billion, IB and its affiliates exceed 1,000,000 trades per day. In addition, our prudent and conservative risk policies make Interactive Brokers a safe haven for your money. Discover some of the reasons why IB, the largest independent US broker/dealer, is the professional traders' and investors' choice.

Visit: Interactive Brokers

Be the first to comment

Leave a Reply

Your email address will not be published.


*