Starbucks Corporation (NASDAQ:SBUX) – Shares in Starbucks went the way of the market on Friday, sliding lower on the heels of disappointing earnings from the likes of Chipotle, McDonald’s and General Electric, among others. The stock is down 4.1% at $45.47 as of 12:20 p.m. in New York. Call and put buying in the January 2013 expiry options this morning suggests mixed expectations for the direction SBUX shares are likely to take during the next few months. Traders itching for a rally in the price of the underlying appear to have purchased 2,000 calls at the Jan. 2013 $47 strike for an average premium of $2.08 apiece. Call buyers stand prepared to profit at expiration next year should the stock climb 8% to top the average breakeven price of $49.08. Meanwhile, trading traffic in the Jan. 2013 $46 strike put, purchased roughly 2,000 times this morning at an average premium of $2.52 each, prepares put buyers to profit in the event of a more than 4% move lower in the share price to $43.48 by expiration. The specialty coffee company is scheduled to report fourth-quarter earnings on November 1st after the closing bell.
Marvell Technology Group Ltd. (NASDAQ:MRVL) – Chip maker, Marvell Technology Group, is getting slammed today, with shares in the name tumbling to the lowest level since March 2009, after the company lowered its fiscal third-quarter revenue guidance and announced the resignation of its CFO. Shares in Marvell are currently down 14% to stand at $7.60 as of 12:35 p.m. ET. Put activity on MRVL this morning indicates some traders are preparing for shares to extend declines in the near term, perhaps leading up to and following the company’s third-quarter earnings report on November 15th. Options volume is heaviest at the Nov. $8.0 strike where nearly 12,000 in-the-money puts changed hands against open interest of 8,333 positions this morning. Time and sales data suggests most of the volume was purchased for an average premium of $0.59 apiece. Put buyers may profit at expiration next month if MRVL shares decline another 2.5% to settle below the average breakeven price of $7.41.
Caitlin Duffy
Equity Options Analyst
The material presented in this commentary is provided for informational purposes only and is based upon information that is considered to be reliable. However, neither Interactive Brokers LLC nor its affiliates warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither IB nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance is not necessarily indicative of future results.
This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities or other financial instruments mentioned in this material are not suitable for all investors. Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue. The information contained herein does not constitute advice on the tax consequences of making any particular investment decision. This material does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation to you of any particular securities, financial instruments or strategies. Before investing, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
