RSH – RadioShack Corporation – Call options on the retailer of consumer electronics goods and services are flying off the shelves this morning with RadioShack’s shares trading 3.95% higher on the day to stand at $22.37 as of 11:15 am (ET). Earlier in the session RSH shares rallied more than 7.6% to secure an intraday high of $23.16. Bullish options investors expecting continued appreciation in the price of the underlying stock this week picked up approximately 2,200 calls at the July $22.5 strike for an average premium of $0.60 apiece. Call buyers at this strike stand ready to amass profits should the retailer’s shares exceed the average breakeven price of $23.10 by expiration on Friday. Traders anticipating a more dramatic upward move in share price purchased 1,700 calls at the higher July $24 strike for an average premium of $0.37 a-pop. RadioShack’s shares must increase at least 8.94% over the current price of $22.37 and surpass the stock’s current 52-week high of $24.00 in order for investors long the July $24 strike calls to make money above the effective breakeven point to the upside at $24.37 by July expiration. Optimists also scooped up at least 1,000 calls at the August $25 strike for an average premium of $0.67 each. Investors long the call options are poised to profit should RadioShack’s shares surge 14.75% to trade above the average breakeven price of $25.67 by August expiration day.
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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