Options Brief: American Axle & Manufacturing Holdings

AXL – American Axle & Manufact. Holdings, Inc. – The auto parts supplier attracted bullish options traders this morning when shares of the underlying stock inched up 2.9% to an intraday high of $8.99. Shares have cooled, however, and are currently flat at $8.74 as of 11:35 am ET. Investors feeling confident that American Axle’s shares are unlikely to collapse in the next 5 months sold approximately 3,000 puts at the January 2011 $6.0 strike to pocket premium of $0.35 per contract. Put sellers keep the full premium received on the transaction as long as AXL shares exceed $6.00 through expiration day. The short position in put options suggests these traders are happy to have shares of the underlying stock put to them at an effective price of $5.65 each if 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Your email address will not be published.