AZO – AutoZone, Inc. – Shares of the retailer and distributor of auto parts and accessories are trading higher by more than 3.85% to stand at $191.38 as of 10:35 am (ET). Earlier in the trading session AutoZone’s shares surged 5.15% to touch an all time high of $193.74. The largest U.S. auto parts retail chain’s shares jumped to the highest price since the company’s 1991 initial public offering after the firm posted third-quarter earnings of $4.12 per share, beating average analyst forecasts of $3.59 a share. Bullish options investors wasted no time populating the June contract with optimistic positions following the positive earnings report. Traders sold roughly 2,000 puts at the June $180 strike to take in an average premium of $3.76 per contract. Put sellers keep the full premium pocketed on the trade as long as AutoZone’s shares trade above $180.00 through June expiration day. The short sale of put options implies investors are more than happy to have shares of the underlying stock put to them at an effective price of $176.24 each should the put contracts land in-the-money at expiration.
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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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