Today’s tickers: KMX, AA & MCO
KMX - CarMax, Inc. – Shares in used vehicle retailer, CarMax, Inc., jumped 13% this morning to $33.00 on positive comments regarding revenue growth and same-store sales at ITG Research. The stock is off its earlier highs this afternoon, trading up 9.3% on the day at $31.90 as of 12:40 p.m. ET. Options traders flocked to CarMax options straight out of the gate this morning, snapping up calls across several expiries to position for further upside in the price of the underlying. Near-term bullish positioning in the front month options is heaviest at the Oct. $32 strike, where around 1,200 calls were purchased for an average premium of $0.50 apiece. Traders long the $32 calls stand ready to profit at October expiration in the event that KMX shares add 1.9% to the current price of $31.90 to exceed the average breakeven point at $32.50. Upside calls expiring November 16th attracted fresh interest, as well. Options traders picked up around 700 of the Nov. $33 strike call at an average premium of $0.92 each and purchased some 480 calls at the Nov. $34 strike for an average premium of $0.60 apiece. Call buyers that may see profits in the event that KMX shares soar to a new 52-week high by November expiration, bought more than 300 calls at the Nov. $35 strike for an average premium of $0.39 per contract. Buyers of the $35 strike call start making money if CarMax’s shares surge 11% over the current price of $31.90 to top $35.39 by expiration next month.
AA - Alcoa, Inc. – All eyes will be on aluminum producer, Alcoa, Inc., on Tuesday when the company reports third-quarter earnings after the closing bell. Shares in the name are bucking the trend on a down…
