NYT – New York Times Co. – Renewed speculation the newspaper publisher may be acquired inspired bullish options activity on the stock during the first half of the trading day. Shares in New York Times Co. jumped 8.00% to an intraday high of $8.38 in morning trading before cooling off by 12:15 pm ET to stand just 3.75% higher on the day at $8.05. Churning of the rumor mill sent speculators to the October $9.0 strike where more 4,200 calls changed hands versus puny previously existing open interest at that strike of just 5 call options. It looks like some traders, positioning for NYT’s shares to continue higher if the firm should perhaps receive a takeover bid by October expiration, bought approximately 2,400 of the October $9.0 strike calls at an average premium of $0.30 apiece. Investors long the calls make money if the newspaper publisher’s shares surge 15.5% over the current price of $8.05 to trade above the average breakeven price of $9.30 by expiration day. Grist from the rumor mill coupled with increased investor demand for options on NYT boosted the stock’s overall reading of options implied volatility 23.1% to 62.16% by 12:25 pm ET. Earlier in the session, NYT’s reading of implied volatility jumped 44.3% to an intraday high of 72.89%.
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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