OptionsHouse

Options Trading News

November 23, 2012  Fri 10:45 AM CT

LXK: SEE CHART GET CHAIN FIND STRATEGIES

Lexmark International has been rebounding since the summer, and one investor thinks it will remain strong.

optionMONSTER's trade scanners detected the purchase of 1,000 January 22 calls for $3.60 and the sale of an equal number of April 23 calls for $3.50. Volume was below open interest in the 22s, so it appears that an existing position was rolled forward in time.

LXK rose 5.04 percent to $25.44. The maker of computer printers languished for years, but announced in August that it would exit the ailing inkjet-printer business. Two months later, earnings and revenue both exceeded consensus estimates.

Today's calls are in the money, so it appears that the investor owns the stock and is using the options to craft a low-risk income trade. He or she paid $0.10 to roll the position, and now have the right to make an additional $1 of upside on the share price. They're also collecting LXK's 5 percent annual dividend yield. See our Education Section for more on how options can be used to turn time into money.

Total option volume is quadruple the daily average in the name so far today.

Share this article with your friends


Related Stories

LXK

Bears see more pain for Lexmark

March 12, 2015

While management has focused on growth areas such as services, long-term contraction in the printer business has dragged the stock down from a seven-year high reached last summer.

Invest Like a Monster - San Diego: June 26-27

Premium Services

Free Webinar

Education & Strategy

Introduction to Theta

This week, we continue our discussion of the strike-based Greeks with Theta...

View more education articles »