July 27, 2012 at 14:28 PM EDT
Expedia Options Eye Higher Highs On The Horizon
  Today’s tickers: EXPE, AMGN & GDOT EXPE  - Expedia, Inc. –  Online travel company Expedia, Inc.’s shares have been on a tear this year. The stock jumped 28% today to hit $58.40 after the company reported higher-than-expected revenue for the second quarter and boosted its quarterly dividend to $0.13 a share. The huge upside move in the stock today lifted Expedia’s gains to 95% for the year so far and spurred heavier-than-usual trading in EXPE options. Traders positioning for the price of the underlying to hit fresh highs snapped up $60 strike calls expiring in August and September this morning, while other strategists appear to be taking profits on bullish strategies initiated ahead of the earnings report. Upside call buyers looked to the Aug. $60 strike where more than 1,700 lots are in play versus previously existing open interest of 308 contracts. Traders driving volume in the $60 calls purchased most of the contracts for an average premium of $0.85 each and stand ready to profit at expiration should shares rally 9% over the current price of $56.00 (as of 12:37 p.m. ET) to settle above $60.85 by expiration. The Sept. $60 strike call is also active today; volume is above 1,800 contracts at present against zero open positions. The most heavily traded calls on Expedia today are the Aug. $50s; volume currently exceeds 10,600 contracts versus open interest in excess of 18,300 contracts. Open interest in the contracts increased sharply this week ahead of earnings as buyers positioned for an approximate 10% move higher in the shares. A far larger upside move than anticipated has the contracts deep in-the-money and it appears some traders may be taking profits off the table. Premium on the Aug. $50 calls this week was between $1.05 and $1.60 per contract; the sale of more than 5,800 contracts this morning for an average premium of $5.31 apiece suggests some strategists may have walked away with substantial gains in hand.…

 

Today’s tickers: EXPE, AMGN & GDOT

EXPE - Expedia, Inc. – Online travel company Expedia, Inc.’s shares have been on a tear this year. The stock jumped 28% today to hit $58.40 after the company reported higher-than-expected revenue for the second quarter and boosted its quarterly dividend to $0.13 a share. The huge upside move in the stock today lifted Expedia’s gains to 95% for the year so far and spurred heavier-than-usual trading in EXPE options. Traders positioning for the price of the underlying to hit fresh highs snapped up $60 strike calls expiring in August and September this morning, while other strategists appear to be taking profits on bullish strategies initiated ahead of the earnings report. Upside call buyers looked to the Aug. $60 strike where more than 1,700 lots are in play versus previously existing open interest of 308 contracts. Traders driving volume in the $60 calls purchased most of the contracts for an average premium of $0.85 each and stand ready to profit at expiration should shares rally 9% over the current price of $56.00 (as of 12:37 p.m. ET) to settle above $60.85 by expiration. The Sept. $60 strike call is also active today; volume is above 1,800 contracts at present against zero open positions. The most heavily traded calls on Expedia today are the Aug. $50s; volume currently exceeds 10,600 contracts versus open interest in excess of 18,300 contracts. Open interest in the contracts increased sharply this week ahead of earnings as buyers positioned for an approximate 10% move higher in the shares. A far larger upside move than anticipated has the contracts deep in-the-money and it appears some traders may be taking profits off the table. Premium on the Aug. $50 calls this week was between $1.05 and $1.60 per contract; the sale of more than 5,800 contracts this morning for an average premium of $5.31 apiece suggests some strategists may have walked away with substantial gains in hand.…
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