Fresh Interest In Capital One Call Options
COF ? Capital One Financial Corp. ? U.S. stocks are moving higher on Friday, with the S&P 500 Index hitting new all-time highs on the heels of data that showed GDP rose at a faster than estimated 4.1% annualized rate in the third quarter. Capital One shares is among the gainers, rising 0.85% during morning trading to $74.27, the highest level since July of 2007.
Activity in Mar ?14 expiry calls options on COF during the first 20 minutes of the session seems to indicate one options player may be positioning for the price of the underlying to extend gains during the first few months of the New Year. The most traded contracts on Capital One by volume this morning are the Mar ?14 $75 strike calls, with more than 4,000 lots in play versus open interest of 1,720 contracts. Time and sales data indicates most of the calls were purchased at a premium of $2.50 each, thus positioning the buyer of those contracts to profit at expiration next year in the event that COF shares rally another 4.3% to exceed the effective breakeven point at $77.50.
Overall options volume on COF is above 5,000 contracts as of 10:35 a.m. EST, which is roughly two times the stock?s average daily volume of around 2,600 contracts. Trading is concentrated in COF calls, driving the call/put ratio on the stock to 10.5 as of the time of this writing.
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