Stock Options Watch: BMY, TIBX, WM

By May 15, 2013, 1:57 PM Author's Blog  

(NYSE:BMY) – Bristol-Myers Squibb Co. – Shares in drug maker, Bristol-Myers Squibb Co., are ripping higher today, up 6.5% at $44.94, the highest level in more than a decade, ahead of the release of the American Society of Clinical Oncology (ASCO) 2013 Annual Meeting abstracts tonight. The ASCO Annual Meeting begins on May 31st in Chicago. Options on BMY are far more active than usual today, with overall volume topping 64,000 contracts by 12:25 p.m. ET, versus average daily volume of around 11,400 contracts. Traders appear to be snapping up call options on the name, establishing near-term bullish positions on the stock to position for further gains in the price of the underlying. Front month calls are seeing most of the action, with intraday call volume well in excess of open interest across several striking prices. More than 7,000 calls have traded at the May $45 strike against open interest of 316 contracts, with roughly 3,600 calls purchased during the first half of the session for an average premium of $0.54 each. Call buyers make money if shares in BMY rally another 1.3% over the current level of $44.94 to settle above the average breakeven price of $45.54 by expiration this week. In and out of the money call options expiring June 21st are also seeing heavy volume in today’s session.

(NASDAQ:TIBX) – TIBCO Software, Inc. – Upside call buying on software maker, TIBCO, suggests some traders are positioning for the price of the underlying to continue to gain ground in the near term. The stock is up 0.40% this morning at $20.91 as of 11:40 a.m. ET. Shares in TIBX, down roughly 30% since this time last year, have managed to rise 15% off a two-year low of $18.18 reached back on April 19th. Bullish options are changing hands at the Jun $20 strike today, with around 5,000 calls in play versus open interest of 2,742 contracts. Time and sales data indicates the bulk of the volume was purchased in the early going for an average premium of $1.88 each. In the money call buyers stand ready to profit at June expiration in the event that TIBCO’s shares rally another 4.6% over the current price of $20.91 to exceed an average breakeven price of $21.88.

(NYSE:WM) – Waste Management, Inc. – Shares in Waste Management are trading at their highest level in more than a decade today, up 1.05% at $41.94 as of midday in New York, and it looks like some traders are positioning for shares to push higher still during the second half of the year. The Oct $42 strike calls are the most actively traded contracts on Waste Management as of the time of this writing, with more than 7,500 calls traded versus open interest of 862 contracts. It looks like most of the $42 calls were purchased for an average premium of $1.26 per contract. Traders long the calls make money if shares in WM rally another 3.0% to top an average breakeven price of $43.26 by October expiration.

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