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Optimistic traders paid a net premium of $1.05 per contract for the debit spread.
The net cost of the debit spread amounts to $1.27 per contract.
The net cost of the debit spread amounts to $2.29 per contract, positioning the investor to breakeven given an 8.15% rally in shares to $42.29 by expiration.
The put player may be utilizing the debit spread to lock in recent gains in the price of the underlying stock.
Option traders long the debit spread are hoping shares increase at least 6.5% from the current value to reach the break-even point on the trade at $66.05.
The debit spread portion of the trade involved the purchase of 25,000 calls at the June $40 strike for an average premium of $2.90 each, marked against the sale of 25,000 calls at the higher June $48 strike for a premium of $0.61 apiece.
Similar(54)
The investor initiated one debit call spread and one credit call spread, suggesting an upper limit on the proposed rally in the underlying.
It is possible the transaction represents an investor closing out a long debit put spread, rather than putting on a riskier credit spread, but both scenarios are bullish plays.
One investor purchased a debit call spread.
One pessimistic individual purchased a debit put spread in the June contract.
The net cost of the debit put spread amounts to $1.16 per contract.
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