KO – Coca-Cola Company – The Dow Jones Industrial Average and S&P 500 Index traded up to record highs this afternoon on the heels of the Fed’s 2:00 p.m. announcement and Fed Chairman Bernanke’s 2:30 p.m. testimony and Q&A session.
All 30 Dow stocks are higher, and Coca-Cola Co. is among the top gainers as of the time of this writing. KO shares had been in negative territory earlier in the session, but staged a sharp reversal after the Fed announcement, immediately rising around 1.3%, and currently trading up 2.0% on the session at $39.55 with 15 minutes remaining before the closing bell.
Heavy trading traffic in October 04 ’13 expiry call options ensued just before 3:00 p.m., with upwards of 20,000 of the $40 strike calls changing hands in the course of a few minutes. Time and sales data suggests most of the contracts were likely purchased for an average premium of $0.42 each. These contracts make money at expiration if shares in KO rally another 2.2% to exceed the average breakeven price of $40.42.
SCSS – Select Comfort Corporation – Shares in the maker of adjustable-firmness mattresses are in positive territory today, up 0.50% at $24.20 as of the time of this writing.
Trading in SCSS call options this morning suggests at least one strategist is positioning for shares in the name to extend gains in the near term. The Oct $25 calls traded 1,000 times against open interest of 834 contracts within the first 15 minutes of the opening bell, with most of the volume purchased at a premium of $1.15 each. The calls may be profitable at expiration next month should shares in the maker of the SLEEP NUMBER ® bed rise 8.0% over the current price of $24.20 to exceed the breakeven price of $26.15. Shares in SCSS last traded above $26.15 back on July 17th.
