COF – Capital One Financial Corp. – Bullish traders flocked to the “what’s in your wallet?” financial services company right out of the gate this morning to pick up near-term call options. Investors populating COF options exchanged more than 7 calls on the stock for each single put option in action ahead of midday in New York. Capital One’s shares increased as much as 2.8% earlier in the session to touch an intraday high of $39.93. The stock is currently trading 1.65% higher on the day to stand at $39.50 as of 11:30 am ET. Options investors hoping to see COF shares continue to appreciate ahead of expiration day this month purchased approximately 3,500 calls at the September $40 strike for an average premium of $0.68 each. Bulls holding these contracts make money if the credit card issuer’s shares rally 3.00% over the current price to trade above the average breakeven point to the upside at $40.68 by September expiration. Optimism spread to the higher September $41 strike where investors picked up 2,600 calls for premium of $0.35 per contract. Call buyers are poised to profit should shares of the underlying stock jump 4.7% to exceed $41.35 by expiration in just over one week’s time. Bullish traders also bought 1,300 call options at the September $42 strike at a premium of $0.17 a-pop. Investors break even on their purchases if COF’s shares surge 6.75% to trade above $42.17 by expiration day. Finally, uber-bulls bought roughly 1,100 calls at the September $43 strike for an average premium of $0.11 apiece. Investors long the calls make money if the financial services provider’s shares rally 9.1% and exceed the average breakeven price of $43.11 at expiration.
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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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