January 11, 2011 at 16:15 PM EST
Hasbro Bulls at it Again
  Today’s tickers: HAS, ALK, LYV, GNW, IBN, COG & BSX HAS  - Hasbro, Inc. –  Bullish options traders flocked to the maker of toys and games for the second day in a row today as shares in the name picked up as much as 2.15% to trade at an intraday high of $46.97. Plain-vanilla call buying on Hasbro caught our eye yesterday, while a more complex bullish scenario played out in July contract calls during the current session. It looks like one investor initiated a delta neutral transaction involving the sale of stock and purchase of out-of-the-money calls to position for a sharp rise in HAS shares by expiration. The trader appears to have sold 112,000 shares of the underlying stock at $46.77 each, marked against the purchase of 4,000 calls at the July $52.5 strike for a premium of $1.40 apiece, on a 0.30 delta. The risk profile of this combination of short stock and long calls is such that the investor benefits from declines in HAS shares because of the sale of stock. Further, the trader realizes substantially greater profits if shares shoot up toward the $52.50-level and beyond because of the growth in delta on the calls given such a move in the price of the underlying. The large size of the call position in relation to the short stock means the acceleration in value on those calls will be more than adequate to mitigate losses on the short stance in shares if the stock rallies. Hasbro reports fourth quarter earnings on February 7, 2011, before the market opens for trading. ALK  - Alaska Air Group, Inc. –  The provider of passenger air service as well as mail and freight services appeared on our ‘hot by options volume’ market scanner today due to bearish activity in February contract call options. Shares in Alaska Air Group fell 1.7% this afternoon to $61.87 by 2:45pm in New York trading. It looks like one trader enacted a credit call spread, selling roughly 1,500 calls at the…
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