Eli Lilly & Co. (NYSE:LLY) – Bullish options are in play on drug maker, Eli Lilly and Co., today as shares in the name tack on 2.3% to $48.56 in early-afternoon trading. The company is scheduled to present Phase II data in rheumatoid arthritis for two investigational autoimmune drugs at the annual meeting of the American College of Rheumatology tomorrow, according to a press release issued by the company last week, and will present at the Credit Suisse 2012 Healthcare Conference on Thursday morning. Traders looking for shares in the name to extend gains this week purchased more than 5,000 calls at the Nov. $48 strike for an average premium of $0.30 apiece. Traders long the calls stand ready to profit at expiration later this week as long as Lilly’s shares exceed the average breakeven price of $48.30. The stock had traded up to a 52-week high of $53.99 as recently as October 17th.
Flagstar Bancorp Inc (NYSE:FBC) – Call options on Flagstar Bancorp are more active than usual today as one strategist appears to be adding to positions that benefit from limited gains in the price of the underlying shares through expiration in January 2013. Shares in FBC, the holding company for Flagstar Bank, are up 2.25% this afternoon to stand at a new 52-week high of $16.43 as of 12:20 p.m. ET. The Jan. 2013 $15 and $17.5 strike call options were active during Friday’s session with one-by-two ratio call spreads trading at an average net premium of $0.66 per contract. Similarly, this morning one strategist purchased 400 of the Jan. 2013 $15 strike calls and sold 800 of the $17.5 strike calls at a net premium outlay of $0.50 per contract. The position looks for Flagstar Bancorp to extend gains during the next couple of months to expiration. The spread established this morning makes money if shares in FBC exceed the breakeven price of $15.50, with maximum possible profits of $2.00 per contract available on the position should shares rise 6.5% over the current price of $16.43 to settle at $17.50 at expiration. Shares in the name last traded around $17.50 back in March 2011.
Equity Options Analyst
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