Options Brief: AstraZeneca (AZN)

AZN – AstraZeneca PLC – The manufacturer of prescription pharmaceutical products attracted one bullish options strategist today despite the 1.70% decline in the value of its shares to $40.70. The optimistic trader positioned for a rebound in the price of the underlying stock by purchasing a plain-vanilla debit call spread in the July contract. The investor picked up 7,400 in-the-money calls at the July $40 strike for a premium of $2.60 each, and sold the same number of calls at the higher July $45 strike for $0.60 apiece. Net premium paid for the transaction amounts to $2.00 per contract. The investor starts to make money as long as AstraZeneca’s shares rally 3.2% to surpass the effective breakeven price of $42.00. Maximum potential profits of $3.00 accumulate should shares surge 10.6% to exceed $45.00 ahead of expiration day in July.

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.

Interactive Brokers: Interactive Brokers offers direct market access to around 80 electronic global markets from a single account. Successful traders and investors understand that superior technology and lower trading costs can result in greater returns. For 32 years we have been building direct access trading technology that delivers real advantages to professionals worldwide. With consolidated equity capital of US $4.4 billion, IB and its affiliates exceed 1,000,000 trades per day. In addition, our prudent and conservative risk policies make Interactive Brokers a safe haven for your money. Discover some of the reasons why IB, the largest independent US broker/dealer, is the professional traders' and investors' choice.

Visit: Interactive Brokers

Be the first to comment

Leave a Reply

Your email address will not be published.