Options Brief: DeVry (DV)

DV – DeVry, Inc. – Shares of the owner and operator of for-profit colleges and universities fell as much as 10.5% in the first half of the trading session to an intraday and new 52-week low of $38.22 on heightened concerns U.S. regulators will toughen regulations on student loans. The actions of one options trader populating DV today suggests the firm’s shares may head lower in the next several months. It appears the investor initiated a bearish risk reversal, selling out-of-the-money call options to finance the purchase of puts. The pessimistic player shed 2,663 calls at the November $55 strike for an average premium of $0.30 each in order to purchase the same number of November $35 strike put options at a premium of $2.40 apiece. Net premium paid to establish the spread amounts to $2.10 per contract. The investor responsible for the transaction is poised to profit should DeVry’s shares plummet 13.9% from today’s low of $38.22 to slip beneath the effective breakeven price of $32.90 by expiration day in November. More than 8,100 option contracts changed hands on DeVry, Inc. by 1:00 pm ET.

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Your email address will not be published.


*