Options Brief: Office Depot

ODP – Office Depot, Inc. – The global supplier of office supplies and services attracted bearish options players during the session with the price of its shares declining more than 2.5% to $4.26 as of 12:30 pm ET. Investors expecting ODP’s shares to remain bogged down for the next couple of months sold nearly 3,000 calls at the November $5.0 strike to take in premium of $0.10 per contract. Call sellers keep the premium received on the transaction as long as Office Depot’s shares fail to rally above $5.00 by expiration day. If traders are selling the calls uncovered they face potentially disastrous losses should ODP’s shares fly higher ahead of November expiration. Losses start to accumulate in this scenario if shares surge 19.7% to trade above the average breakeven price of $5.10 by expiration in November.

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.

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