International Paper is rewarding shareholders, and one investor
is in for the long haul.
optionMONSTER's Heat Seeker monitoring system detected the purchase
of 9,800 January 2015 50 calls for $5.50. Equal-sized blocks were
sold at the same time in the January 40 puts for $3.25 and the
January 60 calls for $2.28. Volume was well above open interest at
all three strikes, indicating that new positions were initiated.
The investor paid essentially nothing to implement the trade, which
. They now stand to collect $10 if the packaging stock closes at
$60 on expiration 16 months from now, with the risk of losing money
on a drop below $40. (See our
IP is down fractionally at $49.12 in afternoon trading but is up 41
percent in the last year. It's been ripping higher as price
increases fatten profit margins despite top-line weakness.
Management boosted its dividend and announced a $1.50 billion share
buyback earlier today.
Shares have been consolidating above $50 for most of 2013. Their
all-time around $60 was achieved in early 2000, and today's bullish
three-way strategy is apparently targeting a return to that level.
Total option volume is 8 times greater than average so far in the
session, according to the Heat Seeker.
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