EXPE – Expedia, Inc. – Options traders established bullish positions on the online travel company this morning despite the 2.2% decline in the value of its shares to an intraday low of $24.85. Investors itching for a sharp rebound in the price of the underlying stock scooped up approximately 1,700 calls at the October $27.5 strike for an average premium of $0.49 apiece. Call buyers make money if, by October expiration, shares in Expedia surge 12.6% to trade above the average breakeven price of $27.99. Bulls also picked up another 1,400 calls at the higher October $29 strike at an average premium of $0.25 each. Investors long the calls stand ready to accrue profits if shares jump 17.7% over today’s low of $24.85 to surpass the average breakeven price of $29.25 by expiration day next month. The overall reading of options implied volatility on the stock is up 12.4% at 41.12% as of 11:35 am ET.
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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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