Today’s tickers: EWZ, VRSN, PFE, MSFT, Q, FXI & NSM
EWZ iShares MSCI Brazil Index ETF – Shares of the Brazil ETF have dipped by less than 1% to stand at $50.93 today. The ticker occupied prime real estate on our ‘most active by options volume’ market scanner after a large volume ratio put spread was established in the September contract. An investor looking for bearish movement on the stock purchased 15,000 puts at the September 40 strike price for a premium of 2.30 apiece spread against the sale of 30,000 puts at the September 30 strike for about 60 cents each. The net cost of the trade amounts to 1.10 and yields a maximum potential profit of 8.90 to the investor if shares were to fall all the way to $30.00 by expiration. Before the position comes good, Brazilian shares would need to decline by 23%. The trader begins to amass profits beginning at the breakeven point at $38.90.
VRSN VeriSign, Inc. – The provider of internet infrastructure services has experienced a share price rise of about 1% today to $24.48. VRSN appeared on our ‘hot by options volume’ market scanner after one investor established a large-volume ratio put spread in the September contract. Likely looking for downside protection on a long stock position, this trader purchased 25,000 puts at the September 25 strike price for 2.90 apiece and sold 50,000 puts at the lower September 20 strike for a premium of 95 cents per contract. The net cost of the transaction amounts to 1.00 to the investor and yields maximum potential gains to the downside of 4.00 should shares fall to $20.00 by expiration. The ratio spread represents some 80,000 contracts in play, trumping the existing open interest on the stock of just 64,919 lots.
PFE Pfizer, Inc. – The pharmaceuticals giant has slipped by more than 1.5% to $14.15 today, but attracted one bullish investor to populate the January 2011 contract. The January 15 strike price saw 50,000 calls picked up by one individual for a premium of 2.16 apiece. The long-call position requires that shares breach the breakeven point at $17.16 by expiration in order for the investor to begin to amass profits. The contracts have more than one and a half years until expiration and require that shares rally by at least 21% during that time period.