Lorillard Inc. (NYSE:LO) – Put options on the third-largest U.S. cigarette maker are changing hands today ahead of the company’s second-quarter earnings report on Thursday prior to the opening bell. Shares in the Lorillard Inc. (NYSE:LO) are down more than 1.0% at $46.00 as of 1:05 p.m. in New York. The most actively traded options as measured by volume on Lorillard Inc. (NYSE:LO) as of the time of this writing are the August and September expiry puts. Front month options volume is concentrated in the Aug $42.5 strike puts, with around 4,700 lots traded versus open interest of 2,613 contracts. Time and sales data suggests most of the $42.5 strike puts were purchased for an average premium of $0.58 apiece during the first hour of the session. The Sep $40 strike puts are also in play, with nearly 7,000 contracts traded so far today. Much of the volume appears to have been purchased at a premium of $0.67 each. Overall options volume on the stock is hovering just below 12,500 contracts as of 1:15 p.m. ET, or roughly 160% of the stock’s average daily volume of around 7,750 contracts.
Verisign, Inc. (NASDAQ:VRSN) – Options on Internet infrastructure services provider, Verisign, Inc. (NASDAQ:VRSN), are active today ahead of the company’s second-quarter earnings report on Thursday. Shares in the name are down 0.50% on the session at $45.52 as of 12:10 p.m. ET. Front month calls are the most traded options on Verisign, Inc. (NASDAQ:VRSN) as of midday in New York, with roughly 5,100 Aug $46 strike calls in play versus open interest of 180 contracts. It looks like most of the $46 call options may have been sold for a premium of $1.15 apiece. Maximum gains of $1.15 per contract are available on the trade as long as shares in Verisign, Inc. (NASDAQ:VRSN) settle below $46.00 at expiration next month. The calls may have been sold outright or written against a long stock position. If sold outright, the trade starts losing money in the event that Verisign, Inc. (NASDAQ:VRSN) shares rally 3.6% over the current price of $45.52 to exceed the upper breakeven price of $47.15.
Caitlin Duffy
Equity Options Analyst
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