Options Brief: Gannet

GCI – Gannet Co., Inc. – Shares of the USA Today publisher fell as much as 3.2% to touch down at an intraday low of $13.07 in the first half of the trading session after the firm was rated new ‘neutral’ with a target share price of $13.00 at UBS. Gannet’s shares are steadily heading towards the $13.00 level as of 11:40 am ET. Investors wary the news and information company’s shares are set to extend losses picked up put options in the April 2011 contract. Long-term pessimists purchased approximately 1,700 calls at the April 2011 $13 strike for a premium of $2.00 apiece. Traders holding these contracts make money if GCI shares plunge 15.8% lower to breach the effective breakeven point to the downside at $11.00 by expiration day. Bearish sentiment spread to the April 2011 $12 strike where some 3,300 puts were purchased for an average premium of $1.55 a-pop. Put buyers at this strike are poised to profit should Gannet’s shares drop 20.00% to trade beneath the average breakeven price of $10.45 ahead of expiration day in April. The overall reading of options implied volatility on the publisher jumped 8.00% to 52.75% by 11:45 am 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.

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