June 27, 2012 at 15:57 PM EDT
O’Reilly Automotive Q2 Guidance Drives Pickup In Options Activity
  Today’s tickers: ORLY, MRK & PCS ORLY  - O'Reilly Automotive, Inc. –  Shares in auto parts retailer, O’Reilly Automotive, are facing double-digit declines today after the company cut its second-quarter same-store sales projection and said earnings for the quarter are likely to come in at the low end of their previously estimated $1.13 to $1.17 a share range. The stock is off the lows of the session, down 15.0% at $81.97 just before midday in New York after earlier sliding as much as 21.5% to an intraday and six-month low of $75.61. The sharp pullback in O’Reilly shares today appears to have attracted contrarian players to the front month calls. Traders positioning for the price of the underlying to rebound in the near term snapped up at least a few hundred calls at the July $80 strike for an average premium of $1.93 apiece this morning. The intraday improvement in the share price during the first half of the session now sees these calls changing hands at $4.30 apiece. Similar bullish positioning is building in the July $85 strike calls, as well. It looks like traders purchased roughly 600 of the $85 calls for an average premium of $0.65 apiece in the first few hours of the trading day, contracts that now tout an asking price of $1.65 each. Call buyers may walk away with big profits at expiration should O’Reilly Automotive’s shares continue to recover during the next few weeks. The front month calls expire the week prior to ORLY’s second-quarter earnings report on July 25 th . MRK  - Merck & Co., Inc. –  Call options on Merck & Co. are active today as shares in the drug maker tack on 1.7% to trade at a near multi-year high of $40.73. The stock has climbed roughly 10.0% since the first of the month. Substantial volume is building in the Aug. $42 strike call where approximately 20,000 lots changed hands by…

 

Today’s tickers: ORLY, MRK & PCS

ORLY - O'Reilly Automotive, Inc. – Shares in auto parts retailer, O’Reilly Automotive, are facing double-digit declines today after the company cut its second-quarter same-store sales projection and said earnings for the quarter are likely to come in at the low end of their previously estimated $1.13 to $1.17 a share range. The stock is off the lows of the session, down 15.0% at $81.97 just before midday in New York after earlier sliding as much as 21.5% to an intraday and six-month low of $75.61. The sharp pullback in O’Reilly shares today appears to have attracted contrarian players to the front month calls. Traders positioning for the price of the underlying to rebound in the near term snapped up at least a few hundred calls at the July $80 strike for an average premium of $1.93 apiece this morning. The intraday improvement in the share price during the first half of the session now sees these calls changing hands at $4.30 apiece. Similar bullish positioning is building in the July $85 strike calls, as well. It looks like traders purchased roughly 600 of the $85 calls for an average premium of $0.65 apiece in the first few hours of the trading day, contracts that now tout an asking price of $1.65 each. Call buyers may walk away with big profits at expiration should O’Reilly Automotive’s shares continue to recover during the next few weeks. The front month calls expire the week prior to ORLY’s second-quarter earnings report on July 25th.

MRK - Merck & Co., Inc. – Call options on Merck & Co. are active today as shares in the drug maker tack on 1.7% to trade at a near multi-year high of $40.73. The stock has climbed roughly 10.0% since the first of the month. Substantial volume is building in the Aug. $42 strike call where approximately 20,000 lots changed hands by…
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