Today’s tickers: JOYG, PRX, POT, IOC, QLGC, CAT & IBB
JOYG – Joy Global, Inc. – The manufacturer of mining equipment used to extract coal, copper, and other minerals, realized a 6% improvement in shares today to $55.13. Large-volume options trading took place just ahead of the closing bell as one investor banked gains and extended a bullish position on the stock. It appears the trader originally purchased 15,000 calls at the January 50 strike on August 4, 2009, for a premium of between 2.00 to 2.55 per contract. Today, he seems to have sold all 15,000 calls for 8.10 apiece. Net profits received on the closing sale amount to a minimum of 5.55 each up to a maximum of 6.10 per contract. Depending on the price the investor paid to initially purchase the calls, he reeled in at least $8,325,000, and could have banked as much as $9,150,000, by selling the now deep in-the-money call options today. Perhaps hoping to accumulate additional profits by expiration in January 2010, the trader doubled up on call options by purchasing 30,000 lots at the higher January 60 strike for an average premium of 3.30 per contract. The investor may add to his profits if shares rally another 15% to surpass the breakeven point at $63.30 by expiration day.
PRX – Par Pharmaceutical Companies, Inc. – The distributor of branded and generic pharmaceuticals in the U.S. appeared on our ‘hot by options volume’ market scanner due to bearish options trading. Shares of PRX fell more than 5% to $22.51 after receiving a downgrade to ‘neutral’ from ‘buy’ at Bank of America Merrill Lynch. One pessimistic option trader initiated a credit spread on PRX using call options in the November contract. The transaction involved the sale of 2,500 calls at the November 22.5 strike for 1.47 apiece, spread against the purchase of 2,500 calls at the higher November 25 strike for 55 cents each. The investor receives a net credit of approximately 92 cents per contract. The full 92 cent credit is retained by the trader as long as the November 22.5 strike call options land out-of-the-money by expiration.
POT – Potash Corporation of Saskatchewan, Inc. – Shares of Canada-based Potash Corp. surged more than 5.5% to $102.90 today on speculation that BHP Billiton Ltd. – the world’s largest mining company – may be interested in acquiring the fertilizer producer. Option traders exchanged more than 85,000 contracts on POT…