Investors Bumps Up Bullish Stance On Gap, Inc. (GPS)

GPS – The Gap, Inc. – Bullish options investors purchased calls and sold puts on the retailer of clothing, accessories and personal care products today with shares of the underlying stock edging up 2.60% to $18.15 by 3:30 pm ET. Traders focused their attention on near-term August contract options, initiating bullish stances on the stock ahead of the retailer’s second-quarter earnings report, scheduled for release after market closes on August 19. August contract options expire the day after GPS reveals its performance for the second quarter of 2010. Optimistic individuals hoping to see shares rally higher ahead of expiration purchased 2,300 now in-the-money calls at the August $18 strike for an average premium of $0.69 each. Call buyers make money if the price of the underlying stock increases 2.98% to trade above the average breakeven point at $18.69 by expiration day. Other options players sold August $18 strike puts 1,600 times to take in an average premium of $0.54 a-pop. Investors selling the puts outright keep the full premium received on the transaction as long as GPS shares exceed $18.00 through expiration in August. Put sellers appear ready and willing to have shares put to them at an effective price of $17.46 each in the event the puts land in-the-money at expiration.

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.