PRU – Prudential Financial, Inc. – Bullish options action on the insurance company this morning indicates one optimistic player is positioning for continued upward movement in the price of the underlying shares through June expiration. Prudential’s shares are up 1.95% at $56.77 as of 11:05 am (ET). The investor purchased a debit call spread, buying 5,000 calls at the June $60 strike for a premium of $1.15 each, and selling the same number of calls at the higher June $65 strike for an average premium of $0.21 apiece. Net premium paid for the spread amounts to $0.94 per contract. The options strategist stands prepared to amass maximum potential profits of $4.06 per contract should Prudential’s shares surge 14.5% over the current price to surpass $65.00 by expiration day. The investor starts to make money only if the price of the underlying stock exceeds the breakeven point at $60.94 by June expiration.
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