FIS – Fidelity National Information Services – A three-legged options combination play on the global provider of banking and payments technology solutions, processing services and information-based services, indicates one strategist is long-term bullish on Fidelity National Information Services. Shares in FIS are currently up 0.20% to stand at $28.55 in the final 20 minutes of the session. The transaction positions the investor to attain maximum possible profits in the position if FIS shares break well above the current 52-week high of $30.78 on the stock. The options player sold 1,105 puts at the January 2012 $22.5 strike for an average premium of $1.03 each in order to offset the cost of buying the same number of January 2012 $30 strike calls at an average premium of $2.23 apiece, marked against the sale of 1,105 calls at the higher January 2012 $32.5 strike for an average premium of $1.05 a-pop. Net premium paid to initiate the three-legged spread amounts to $0.15 per contract. Thus, the options trader stands ready to make money should FIS shares surge 5.6% over the current price of $28.55 to exceed the average breakeven point to the upside at $30.15 ahead of expiration day next January. Maximum potential profits of $2.35 per contract are available to the trader should shares in Fidelity National Information Services jump 13.8% to trade above $32.50 before the contracts expire in 2012.
AXL – American Axle & Manufacturing Holdings, Inc. – Shares of the auto parts manufacturer shot up as much as 9.0% this afternoon to secure an intraday high of $15.25 by 3:40pm in New York trading on unconfirmed takeover chatter. Rumors that Magna International Inc. may place a $23 to $25 cash bid for AXL spurred a rally in the price of the American Axle’s shares and drove speculators to options in the name. Additionally, analysts at JPMorgan Chase & Co. reportedly rated AXL at ‘overweight’ and said shares could move into the upper-teens in the next 12-24 months. Near-term call options are far and away the most popular make and model changing hands on the stock today. Investors exchanged more than 3,500 now in-the-money calls at the January $15 strike versus previously existing open interest of 755 at that strike. It looks like more than half of these calls were purchased at an average premium of $0.36 apiece. Bullish sentiment spread to the higher January $16 strike where another 1,050 calls were picked up for an average premium of $0.13 per contract. Call buyers at this strike are prepared to make money should shares in American Axle rally another 5.8% over the current price of $15.25 to surpass the average breakeven point on the upside at $16.13 by January expiration. Notable call buying also took place at the February $16 and $17 strikes this afternoon. Options implied volatility on the auto parts maker is up 9.5% at 51.71% in the final 30 minutes of the trading session.