Manulife Financial reports earnings next week, and the options paper heated up yesterday.
Activity focused solely in November, with traders buying the 17 calls for $0.70 and selling the 18s for $0.10. Chunks of 2,500 contracts traded in each.
Owning calls locks in where they can buy the stock, while selling calls will force them to unload shares if the strike price is reached. Combining the two controls a move between $17 and $18. They’ll collect $1 if that higher price is reached, a 67 percent gain on their $0.60 cost.
— Option Monster