OMX – OfficeMax Incorporated – Shares of the office supplies retailer rallied nearly 6.7% to briefly touch an intraday high of $16.76 this morning. However, OMX was unable to hold onto earlier gains, and shares are currently up just 0.25% to stand at $15.75 as of 11:07 am (ET). The initial surge in the price of the underlying stock inspired bullish options strategists to take action. Investors anticipating continued appreciation in the retailer’s shares purchased approximately 1,400 in-the-money calls at the July $15 strike for an average premium of $1.65 apiece. Call buyers at this strike price are prepared to profit should shares trade above the average breakeven price of $16.65 ahead of July expiration. Optimism spread to the higher July $17.5 strike where 1,500 call options were purchased at an average premium of $0.61 each. Investors long these contracts make money if OfficeMax’s shares jump 15% from the current price of $15.75 to surpass the effective breakeven price of $18.11 by expiration day next month.
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.
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