Markets

Bull positions for free ride on FedEx

FedEx is attempting to rebound, and one bull wants a free ride to the upside.

optionMONSTER's Heat Seeker tracking system detected the purchase of 5,000 September 92.50 calls for $0.26 and the sale of an equal number of September 65 puts for $0.36 and $0.37. The trade resulted in a credit of $0.10 to $0.11 and will make profits from a quick rally higher.

It also stands to lose money if the shipping stock declines. If FDX remains between the two strike prices on expiration, the position will expire worthless.

FDX is down 0.81 percent to $81.19 in morning trading and has lost 12 percent of its value in the last month. Its last earnings report on June 22 was bullish, with profit beating expectations and guidance strong as management raises prices while controlling costs. Earlier this month, the company boosted rates once again.

Today's bullish trade is an example of how investors can place low-risk trades at little to no cost, which don't need to be unwound if the stock fails to rally. The transaction accounted for almost all the activity in FDX so far today.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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