IB Options Brief: TJX Companies, Inc. (TJX) & InfoSpace, Inc. (INSP)
TJX ñ TJX Companies, Inc.
A sizable put spread on high-flying off-price retail chain operator, TJX Companies, appears to be a near-term bullish bet on the stock. Shares in TJX, up 1.4% at $41.86 this afternoon, have rallied more than 60.0% since this time last year.
The sale of a 10,164-lot June $35/$40 put spread results in a net credit of $0.61 per contract, which the trader keeps as long as shares in TJX exceed $40.00 through June expiration. Though a limited risk strategy, the spread could still result in substantial losses of up to $4.39 per contract in the event that TJX shares drop 16.4% to trade below $35.00 at expiration next month.
Losses start to amass on the downside if the stock dips beneath the effective breakeven price of $39.39. TJX Companies, Inc. is scheduled to report first-quarter earnings ahead of the opening bell on May 15th.
INSP ñ InfoSpace, Inc.
Shares in the provider of Internet search tools and technologies are soaring this morning, up 26.8% at $13.92 as of 11:40 a.m. ET, the highest since January 2008. InfoSpace reported first-quarter earnings after the close on Wednesday and forecast second-quarter revenues above sales anticipated by analysts.
The sharp rally in INSP has generated hefty profits for one options player who appears to have established a sizable bullish bet on the stock a couple days prior to the earnings release.
Open interest in the May $12.5 strike call suggests 500 contracts were purchased for a premium of $0.10 apiece on Monday morning. Seventy-two hours later, the call buyerís contracts could fetch roughly 14 times the purchase price given the current bid/ask on the options of $1.40/$1.50.
Note: The material presented in this commentary is provided forinformational purposes only and is based upon information that isconsidered to be reliable. However, neither Interactive Brokers LLC norits affiliates warrant its completeness, accuracy or adequacy and itshould not be relied upon as such. Neither IB nor its affiliates areresponsible for any errors or omissions or for results obtained from theuse of this information. Past performance is not necessarily indicativeof future results.
This material is not intended as an offer or solicitation for thepurchase or sale of any security or other financial instrument.Securities or other financial instruments mentioned in this material arenot suitable for all investors. Any opinions expressed herein are givenin good faith, are subject to change without notice, and are onlycorrect as of the stated date of their issue. The information containedherein does not constitute advice on the tax consequences of making anyparticular investment decision. This material does not take into accountyour particular investment objectives, financial situations or needsand is not intended as a recommendation to you of any particularsecurities, financial instruments or strategies. Before investing, youshould consider whether it is suitable for your particular circumstancesand, as necessary, seek professional advice.
View Caitlin Duffy's post archive >