Today’s tickers: SAP, CTRP & JBLU
SAP – SAP AG – Put options on SAP are active on Friday, with shares in the software company down more than 4.0% in the early going at $72.42. SAP’s shares are declining in sympathy with Accenture, the world’s second-largest technology-consulting company, after that company posted lower-than-expected third-quarter revenue after the closing bell on Thursday. Traders positioning for shares in SAP to potentially extend declines during the next few weeks picked up roughly 2,000 puts at the Jul $72.5 strike for an average premium of $1.97 each. The bearish strategy makes money at expiration in the event that SAP’s shares slide 2.6% from today’s low of $72.42 to breach the average breakeven point on the downside at $70.53. Shares in the name, down nearly 12% since the start of 2013, last traded below $70.53 back in November of 2012. SAP is scheduled to report second-quarter earnings ahead of the open on July 18th.
CTRP – Ctrip.com International, Ltd. – Upside call options on Ctrip.com are active this morning, with shares in the online provider of travel services in China rising 2.0% to $33.38 during morning trading. The most heavily traded contracts as measured by volume thus far in the session are the Aug $34 strike calls, with roughly 2,500 lots in play versus open interest of 12 contracts. Time and sales data suggests most of the calls were purchased within a few minutes of the opening bell at an average premium of $2.03 apiece. Call buyers stand ready to profit at expiration in August should shares in CTRP rally another 10% over the current price of $32.87 to exceed the average breakeven point at $36.03. Ctrip.com’s shares are up better than than 90% since this time last year.
JBLU – JetBlue Airways Corp – Takeover chatter sparked heavier than usual trading traffic in out-of-the-money call options on air carrier, JetBlue, Inc., this morning. Shares in the name rose as much as 9.0% near the open to $6.63, the highest level since mid-May, after a report in Brazilian newspaper, Folha de S.Paulo, on Friday said that David Neeleman, the founder and former CEO of JetBlue and current owner of Brazilian airline Azul Linhas Aereas, is creating an investment fund to buy back control of the company and purchase TAP, a Portuguese airline. Neeleman, according to a report by Bloomberg reporter, Mary Schlangenstein, said, “No talks are underway” for such a fund during a telephone interview today. Shares are well off earlier highs, but remain up 3.3% at $6.28. Options on JBLU popped on the unconfirmed takeover rumors, with volume rising to 12,100 contracts by 11:40 a.m. ET versus the usual average daily volume of around 1,100 contracts. The Jul $7.0 strike calls are the most active, with some 7,300 contracts traded as of the time of this writing. It looks like most of the calls were purchased by for an average premium of $0.075 each. The bullish position may be profitable at expiration next month if shares in JBLU rally more than 12% over the current price of $6.28 to surpass the average breakeven point at $7.075.
Caitlin Duffy
Equity Options Analyst
