TEX – Terex Corp. – Bullish options investors are buying near-term call options on the global equipment manufacturer this morning with shares of the underlying stock trading higher by 2.25% to stand at $22.25 as of 10:42 am (ET). Traders picked up 1,000 in-the-money call options at the June $20 strike for an average premium of $2.21 apiece. Investors long the in-the-money contracts are prepared to accrue profits as long as Terex shares exceed the average breakeven price of $22.21 through June expiration day. Optimism spread to the higher June $23 strike where 1,300 calls were purchased at an average premium of $0.77 per contract. Call-buyers at this strike price make money if the machinery maker’s shares rally another 6.8% to surpass the average breakeven point at $23.77 by expiration day. Finally, options players expecting shares of the underlying stock to trade below $24.00 through expiration sold 1,000 calls outright at the June $24 strike to take in an average premium of $0.48 each. Investors keep the full premium received per contract as long as TEX shares do not rally above $24.00 ahead of June 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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