Options Activity Alert: TMO, ODP, LYB

TMO – Thermo Fisher Scientific, Inc. – Front month call buying on the provider of analytical technologies and laboratory products suggests at least one options player is positioning for the price of the underlying to extend gains in the near term. Shares in Thermo Fisher Scientific moved up sharply in the first three months of the 2012, climbing nearly 30.0% to $58.37 by the end of March. April showers washed away some of those gains, however, with the stock surrendering around 9.0% during the first two weeks of this month. Today’s 2.6% pop in the price of the underlying to $54.72 saw a pickup in near-term bullish action on the stock. One or more traders snapped up calls on TMO, with around 1,090 contracts changing hands at the April $55 strike against open interest of 254 positions. Most of the calls appear to have been purchased for an average premium of $0.50 apiece, thus positioning buyers to profit should Thermo Fisher’s shares increase another 1.4% to surpass the breakeven price of $55.50 by expiration next week. The Waltham, Massachusetts-based company is scheduled to report first-quarter earnings ahead of the opening bell on April 25th, the week following options expiration.

ODP – Office Depot, Inc. – The single-largest trade in Office Depot options this morning appears to be a vote of confidence in the office supplies retailer, initiated by an investor positioning for shares in the name to trade north of $2.50 through October expiration. Shares today rose 3.5% to stand at $3.23 as of 12:45 p.m. in New York. It looks like the strategist responsible for the bullish bet on ODP sold 2,500 puts at the Oct. $2.5 strike to pocket premium of $0.25 per contract. The trader keeps the full amount of premium as long as shares in Office Depot exceed $2.50 at expiration. The put seller could wind up having 250,000 shares of the underlying put to him at an effective price of $2.25 a share should the options land in-the-money at expiration.

LYB – LyondellBasell Industries NV – Options trading on chemical producer, LyondellBasell Industries, suggests one strategist is positioning for shares in the Rotterdam-based Company to potentially rally to fresh all-time highs during the next five months. Shares in LYB are up 3.2% this afternoon to stand at $42.53. Signs of bullish sentiment cropped up in the September expiry options, where it looks like one trader purchased a 2,200-lot Sep. $45/$55 call spread for a net premium of $2.70 per contract. The spread yields profits at expiration as long as shares in LYB rally another 12.2% to surpass the effective breakeven price of $47.70, while maximum potential profits of $7.30 per contract are available in the event that LYB’s shares jump 29.3% to top $55.00. LyondellBasell is scheduled to report first-quarter earnings ahead of the opening bell on April 30th.

About Caitlin Duffy 373 Articles

Affiliation: Interactive Brokers

Caitlin Duffy joined Interactive Brokers in 2009. In her role as Equity Options Analyst, Caitlin provides daily market commentary; highlighting various options trades, trading patterns and strategies of interest. Through Interactive Broker's webinar program, Ms. Duffy presents a number of educational, options-related events describing the theoretical pricing of options, the option Greeks as well as options strategies.

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