United Parcel Service, Inc. (NYSE:UPS) – Shares in UPS are off their lows of the session this afternoon, down just 0.05% to stand at $76.28 as of 12:20 p.m. ET. The stock joined in the strong broad-based rally in equities this week after U.S. lawmakers finally came to a last-minute agreement to avoid drastic spending cuts and tax increases. Options traders positioning for shares in United Parcel Service, Inc. (NYSE:UPS) to increase significantly during the first half of this year appear to be picking up July expiry calls. It looks like traders exchanged upwards of 10,900 calls at the July $77.5 strike this morning versus open interest of 3,731, and purchased most of the contracts for an average premium of $2.73 apiece. Call buyers stand ready to profit at July expiration should shares in United Parcel Service, Inc. (NYSE:UPS) increase more than 5% to top the average breakeven price of $80.23. Shares in the name last traded above $80.23 in July 2012. United Parcel Service, Inc. (NYSE:UPS) reports fourth-quarter earnings four weeks from today.
Mattel, Inc. (NASDAQ:MAT) – Toy maker, Mattel, Inc. (NASDAQ:MAT), popped up on our market scanners today following heavy volume in the February expiry put options. Shares in the name are currently down 0.30% on the day to stand at $36.70, but closed out 2012 up better than 30% for the year. Some of the trading traffic in Mattel, Inc. (NASDAQ:MAT) puts today may be the work of strategists locking in gains and bracing for possible declines in the price of the underlying after the company reports fourth-quarter earnings at the end of January. Traders exchanged approximately 2,100 in-the-money puts at the Feb. $38 strike, buying most of the contracts at an average premium of $2.00 apiece. These contracts start making money if shares in Mattel dip below the average breakeven price of $36.00 by expiration next month. The Feb. $36 strike calls are in play today as well, with around 1,800 lots purchased for an average premium of $0.97 each. Traders long the $36 strike put options may profit at February expiration should Mattel’s shares slide 4.6% from the current level to breach the average breakeven price of $35.03. Finally, put volume on Mattel today is greatest at the Feb. $37 strike where two blocks of 2,500 put options each changed hands against open interest of 85 contracts.