WU – Western Union Co. – A sizeable chunk of puts were purchased on the global money transfer and payment services company today with the price of the underlying shares trading lower by 0.80% to stand at $17.17 as of 12:55 pm ET. Earlier in the session Western Union’s shares rallied as much as 0.85% to touch an intraday high of $17.46. It looks like the pessimistic player bought 23,000 puts at the October $16 strike for an average premium of $0.15 per contract. Profits are available to the investor if Western Union’s shares decline another 7.7% from the current price of $17.17 to breach the effective breakeven point to the downside at $15.85 by October expiration. The large size of the transaction may mean the responsible party is hedging a long position in the underlying shares. If this is the case, the trader is likely taking a cautiously optimistic stance on WU rather than an outright bearish one, through expiration day next month. Increased activity in Western Union put options helped lift the stock’s overall reading of options implied volatility 7.00% to 28.85% by 1:00 pm in New York trading.
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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