Options Brief: Safeway (SWY)

SWY – Safeway, Inc. – Shares of the North American food and drug retailer are up 1.35% to stand at $21.57 as of 11:00 am (ET) after earlier rallying nearly 3.4% at the start of the trading session to touch an intraday high of $22.00. Bullish options traders burst straight out of the gate this morning to pick up call options in the July and September contracts. One optimistic individual purchased 2,000 calls at the July $22.5 strike for an average premium of $0.375 apiece. The plain-vanilla call buyer is prepared to make money on the acquisition as long as Safeway’s shares rally 6.05% from the current price of $21.57 and trade above the effective breakeven price of $22.875 by expiration day next month. Buying interest spread to the September $22.5 strike where it looks like one investor shelled out $1.00 per contract to take ownership of 1,000 call options. The individual responsible for the purchase profits only if the price of the underlying shares rises 8.95% to exceed the breakeven price of $23.50 by September expiration. The jump in demand for call options on Safeway, Inc. lifted the stock’s overall reading of options implied volatility 7.7% to 27.16% by 11:05 am (ET).

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Your email address will not be published.