TEVA – Teva Pharmaceutical Industries Ltd. – The Israel-based manufacturer of generic and branded drugs attracted bullish options investors during the trading session. Teva’s shares increased as much as 2.70% in morning trading to touch an intraday high of $53.18. Call buyers dominated trading activity and exchanged more than 5.9 calls on the stock for each single put option in play thus far today. Investors picked up 2,800 now in-the-money calls at the September $52.5 strike for an average premium of $0.78 each. Traders long the calls are poised to profit should Teva’s shares exceed the average breakeven price of $53.28 by expiration. Bullish sentiment spread to the higher September $55 strike where approximately 5,100 calls were picked up for an average premium of $0.21 each. The drug manufacturer’s shares must increase 3.8% over today’s high of $53.18 in order for September $55 strike call buyers to start to accumulate profits above the average breakeven point of $55.21. Finally, uber-bulls bought roughly 1,300 calls at the September $60 strike for premium of $0.05 a-pop. Traders holding these contracts make money if TEVA shares jump 12.9% to trade above the effective breakeven price of $60.05 by September expiration. The firm’s overall reading of options implied volatility climbed 8.5% to 23.51% by 1:00 pm ET.
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.
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