Today’s tickers: OPEN, FDO & EAT
OPEN – OpenTable, Inc. – Shares in OpenTable are moving lower this morning, down 2.9% at $65.96 as of 11:10 a.m. ET, after analysts at Citigroup initiated a ‘sell’ rating on the stock with a price target of $58.00. Options on the provider of online restaurant reservations are more active than usual, with volume nearing 1,200 contracts versus the stock’s average daily volume of around 600 contracts. Front month put options are seeing the most action, specifically at the Jul $65 strike where more than 800 contracts have changed hands so far today. It looks like most of the $65 puts were purchased for an average premium of $1.13 apiece, thus positioning buyers to profit at expiration next week in the event that OpenTable’s shares dip 3.2% from the current price of $65.96 to breach the average breakeven point on the downside at $63.87.
FDO – Family Dollar Stores, Inc. – Upside call options are changing hands on discount retailer, Family Dollar Stores, Inc., today with shares in the name up as much as 4.6% in the early going to touch a six-month high of $66.90. The company reported better than expected third-quarter comparable store sales growth and higher than expected third-quarter earnings ahead of the opening bell. The Aug $67.5 strike calls attracted the most volume during morning trading, with upwards of 3,900 contracts in play against open interest of 138 contracts. It looks like most of the $67.5 strike calls were purchased for an average premium of $1.60 apiece. Call buyers stand ready to profit at expiration next month should shares in FDO rally another 3.3% over today’s high of $66.90 to surpass the average breakeven price of $69.10. Shares in Family Dollar Stores last traded above $69.10 in December of 2012.
EAT – Brinker International, Inc. – Shares in the operator of restaurant brands, Chili’s Grill & Bar and Maggiano’s Littly Italy, are in negative territory today, down 0.90% at $41.36, after the stock yesterday rose to an all-time high of $41.93. Options activity on Brinker International this morning suggests one or more traders are bracing for shares in the name to decline during the next five weeks. The Aug $40 puts attracted the most volume during the first half of the session, with roughly 3,600 lots in play versus open interest of 530 contracts. Traders purchased most of the $40 puts for an average premium of $1.27 apiece, and may profit at expiration next month in the event that EAT’s shares slide more than 6.0% from the current price of $41.36 to trade below the breakeven point on the downside at $38.73. Brinker International is scheduled to report fourth-quarter earnings ahead of the open on August 2nd.
Caitlin Duffy
Equity Options Analyst
