Today’s tickers: VZ, FINL & HGG
VZ - Verizon Communications, Inc. – Upside call options are in play on Verizon this morning, with shares in the wireless carrier up better than 2.1% on the session at $44.53 on an upgrade to ‘Overweight’ from ‘Neutral’ with a 12-month target price of $50.00 at Piper Jaffray. Traders positioning for shares in Verizon to rise to their highest level since October 2012 picked up roughly 1,700 calls at the May $46 strike for an average premium of $0.64 apiece. Call buyers stand ready to profit at May expiration should shares in VZ rally another 4.7% to top the average breakeven price of $46.64. Nearer-term bullish activity is notable in the Feb. $44 strike calls, where upwards of 3,400 in-the-money options changed hands in the early going. It looks like most of these calls were purchased at an average premium of 0.82 each. Traders long the $44 strike call options make money if shares in Verizon top $44.82 by expiration in two weeks.
FINL - Finish Line, Inc. – Shares in the specialty retailer of athletic footwear and accessories are trading modestly higher on Friday, up 0.20% at $18.68 on a strong up-day for U.S. stocks. Trading traffic in Finish Line options this morning suggests one or more traders are preparing for shares in the name to slip to a new 52-week low during the next few months. Investors in the retailer have had a rough six months, with the price of the underlying declining more than 30% off a six-month high of $24.90 in September, down to a 52-week low of $16.87 on January 8th. Options traders positioning for Finish Line’s shares to pullback purchased roughly 675 puts at the May $17.5 strike for an average premium of $0.98 apiece this morning. Put buyers may profit if shares in FINL drop 11.5% from the current price of $18.68 to trade below the breakeven point at $16.52. Indianapolis-based Finish Line reports fourth-quarter earnings at the end of March.
HGG - hhgregg, Inc. – Options on the specialty retailer of consumer electronics and home appliances are active this morning, with shares in hhgregg rallying as much as 11.1% to an intraday high of $9.42.The stock yesterday closed up more than 10% on the heels of the company’s third-quarter earnings report released ahead of the opening bell on Thursday. Trading traffic in HGG calls today indicate some traders are betting the stock may extend gains in the near term. The Mar. $10 strike calls are seeing the most volume, with upwards of 680 contracts in play against zero open interest. Time and sales data suggests most of the Mar. $10 strike calls were purchased for an average premium of $0.25 each. Traders long the calls stand ready to profit at March expiration in the event that hhgregg’s shares rally 9% over the current price of $9.42 to exceed the average breakeven point at $10.25. Shares in the name last traded above $10.25 in July 2012.