Today’s tickers: MCK, SWY, EXM & CVLT
MCK – McKesson Corp. – Bulls are buying up call options on the drug and medical supplies distribution company today ahead of the firm’s third-quarter earnings report after the final bell. Shares in McKesson are currently up 0.50% to stand at $74.52 as of 12:25pm in New York. More than 5,800 calls have changed hands at the February $75 strike on paltry previously existing open interest of just 819 contracts at that strike. Investors taking bullish positions on McKesson ahead of earnings purchased more than 5,000 of the calls for an average premium of $1.45 per contract. Call buyers stand ready to make money should shares in the name rally another 2.6% to surpass the average breakeven price of $76.45 by February expiration. McKesson Corp.’s shares, which rallied up to $75.49 last week, have not traded this high since 1999. Options implied volatility on McKesson is up 13% at 26.23% in early afternoon trade ahead of earnings this evening.
SWY – Safeway Inc. – Activity in near-term put options on the food and drug retailer today suggests some investors expect shares in Safeway to rebound ahead of February expiration. Shares are up 1.25% at $20.77 just before 12:45pm in New York, but are down roughly 13.45% since November 5, 2010. Safeway will reveal its performance for the fourth quarter before the opening bell tolls on February 24, 2011. Bullish players appear to have sold the majority of the 18,500 puts that have changed hands at the February $20 strike on open interest of 1,595 contracts for an average premium of $0.20 each. Put sellers keep the full premium received on the sale as long as shares in Safeway exceed $20.00 through expiration day next month. More than 3,750 in-the-money put options changed hands at the higher February $23 strike on previously existing open interest of just 6 contracts. It looks like nearly 2,000 of the put options sold for an average premium of $2.57 a-pop. Investors selling the puts…
