Dell Call Options Active in Afternoon Trading

Today’s tickers: DELL, AGU, EEM, GERN, SPY, IP, SFD & CHS DELL  - Dell, Inc. –  Speculation that Michael Dell, Chairman and CEO of Dell, Inc., may buy the computer company or pay a special dividend lifted shares of the world’s third-largest PC maker this afternoon and spurred demand for out-of-the-money call options. Dell’s shares rallied nearly 3.00% today to touch an intraday high of $14.14, but are currently up 1.50% at $13.94 as of 3:05 p.m. Options traders honed in on October $14 strike calls, exchanging more than 23,100 of those contracts by 3:00 p.m., versus previously existing open interest of 10,783 calls at that strike. It looks like roughly 11,800 of those call options were purchased at an average premium of $0.21 a-pop. Call buyers make money if Dell’s shares exceed the average breakeven price of $14.21 by October expiration on Friday. Other optimistic signaling on the stock involved the sale of some 2,100 in-the-money puts at the October $14 strike where investors received an average premium of $0.34 per contract. Options implied volatility is up 15.2% to stand at 41.52% with less than one hour remaining before the final bell. AGU  - Agrium, Inc. –  Shares of Canada’s second-largest fertilizer producer rallied as much as 3.2% today to reign in an intraday high of $85.66 after corn futures jumped to a near two-year high. Agrium was upgraded to ‘sector outperformer’ from ‘sector performer’ at CIBC World Markets where analysts upped their target share price on the company to $100.00 from $70.00. One options trader was prepared for the bullish move in the Agrium’s shares and opted to book profits, as well as extend optimism on the stock in the November contract. It looks like the investor purchased 10,000 calls at the November $85 strike for an average premium of $2.75 apiece back on October 8, 2010, when shares were trading around $80.36. Today the trader sold the calls for a premium of $4.10 apiece to pocket net profits of $1.35 per contract. Next, the investor extended bullish sentiment on the stock by picking up a fresh batch of 10,000 calls at the higher November $90 strike for an average premium of $2.375 each. The new long call position is profitable for the investor if Agrium’s shares surge 7.85% over today’s high of $85.66 to surpass the average breakeven point at $92.375 by November expiration. EEM  - iShares MSCI Emerging Markets Index ETF –  A sizable put…
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