TYC – Tyco International Ltd. – Shares of the provider of security products and services surged 5.8% at the start of the trading session to secure an intraday high of $38.88 on news the company is replacing Smith International to reclaim a spot in the S&P 500 Index. Tyco’s shares are currently up 4.4% to stand at $38.35 as of 12:30 pm ET. Investors rejoined in the reindexation news and positioned for continued bullish movement in the price of Tyco’s shares by picking up at least 1,000 calls at the September $39 strike for an average premium of $0.86 each. Call buyers at this strike are poised to profit should TYC shares rally 3.9% over the current price of $38.35 to surpass the average breakeven price of $39.86 by expiration day next month. Traders populating TYC options today exchanged more than 3.2 calls to each single put contract in play on the stock thus far in the 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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