GIS – General Mills, Inc. – Put buying bears flooded the options field on the global manufacturer and marketer of branded consumer foods this afternoon with shares of the underlying stock down 1.30% to stand at $38.04 just after 3:00 pm (ET). Pessimistic players picked up approximately 7,800 puts at the July $37.5 strike by paying an average premium of $0.68 per contract. Investors long the July $37.5 strike put options are positioned to profit should General Mills’ shares fall another 3.2% to trade below the average breakeven point to the downside at $36.82 by July expiration day. Bearish sentiment spread to the August $37.5 strike where some 2,100 puts were purchased at an average premium of $1.12 each. Investors anticipating more significant erosion in the price of the underlying shares by August expiration coveted roughly 8,100 puts at the August $35 strike for an average premium of $0.43 apiece. Put players holding the August $35 strike contracts make money if GIS shares plunge 9.1% to breach the average breakeven point on the puts at $34.57 by expiration day in August. The surge in demand for options on the food manufacturer lifted the stock’s overall reading of options implied volatility 16% to 22.31% in afternoon trading.
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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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