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Options Trades Look For Upside In Yahoo

Posted on the 28 February 2014 by Phil's Stock World @philstockworld

Of those contracts that expire 07Mar’14, the most traded YHOO options by volume are the $41 strike calls, with around 6,000 lots in play against zero open interest. Time and sales data indicates most of the volume was purchased for an average premium of $0.17 each. These upside calls may be profitable at expiration next week in the event that Yahoo’s shares rally another 5.0% over the current price of $39.12 to exceed the breakeven price of $41.17. Traders targeted a range of striking prices in the weekly options, exchanging 2,000 of the $42 strike calls and buying most of the contracts at a premium of $0.10 apiece. These far out of the money calls make money at expiration if shares in Yahoo surge 7.5% to top the breakeven price of $42.10, though of course the options need not be held to expiration to be profitable. A rally to new 52-week highs for the stock early in the upcoming trading week could push the value of the $42 strike calls up substantially higher than the $0.10 premium paid for the contracts this morning. Finally, nearer to the money weekly calls attracted buyers as well, with the 07Mar’14 $39.5 and $40 changing hands on Friday morning.


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