American Capital Agency Corp. (NASDAQ:AGNC) – Shares in mortgage REIT, American Capital Agency Corp., fell as much as 9% this morning to an intraday low of $29.63, extending recent declines following the Fed’s decision last month to expand its mortgage bond-buying program. The stock, currently off its lows and down 2.4% on the day at $31.91 as of 1:05 p.m. ET, has dropped 13% in the past four weeks. A sizable bullish options trade initiated on AGNC this morning suggests one strategist is prepared to benefit from a rebound in the price of the underlying. The options player appears to have purchased 2,120 calls at the Nov. $31 strike for a premium of $1.27 apiece, and sold 4,240 calls at the Nov. $34 strike at a premium of $0.20 each. Net premium paid to establish the spread amounts to $1.07 per contract, with profits available on the upside in the event that AGNC shares reverse course and top the breakeven price of $32.07 by November expiration. Maximum potential profits of $1.93 per contract are available on the position should shares in the name rally 6.5% to settle at $34.00 at expiration next month. American Capital Agency Corp. is scheduled to report third-quarter earnings after the market closes on October 29th.
LyondellBasell Industries NV (NYSE:LYB) – Commodity chemicals producer, LyondellBasell Industries, popped up on our scanners this morning due to heavier-than-usual trading traffic in the November expiry call options. Shares in LYB, currently up 0.65% on the day at $51.19, have increased sharply during the past 52-weeks, up roughly 90% since this time last year. One or more traders positioning for shares in the name to hit fresh 52-week highs in the near term snapped up around 4,500 calls at the Nov. $55 strike for an average premium of $0.54 apiece. Call buyers stand ready to profit at November expiration should LyondellBasell’s shares climb 8.5% to exceed the average breakeven price of $55.54. LYB reports third-quarter earnings on October 26th prior to the opening bell.
Caitlin Duffy
Equity Options Analyst
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