TYC – Tyco International Ltd. – Manufacturing and service company, Tyco International Ltd., enticed bullish options players to the July contract even though the price of its shares are down 2.3% to $36.99 as of 11:00 am (ET). Investors expecting Tyco’s shares to rebound ahead of expiration next month purchased approximately 3,600 calls at the July $37 strike at an average premium of $1.40 per contract. Call buyers at this strike price make money if the price of the underlying stock increases 3.8% to surpass the average breakeven price of $38.40 by July expiration. The jump in demand for call options on Tyco International Ltd. helped lift the stock’s overall reading of options implied volatility 14.9% to 30.70% in the first half of the trading session.
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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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