Bearish Bets On Safeway Inc. (SWY) Pay Off As Stock Tumbles After Earnings

Coinstar, Inc. (NASDAQ:CSTR) – Shares in the provider of Redbox self-service DVD and video game rental kiosks are moving higher today ahead of the company’s first-quarter earnings report after the closing bell. Options activity on the stock suggests some traders are positioning for Coinstar, Inc. (NASDAQ:CSTR)’s shares to rally post-earnings, with the stock currently trading higher by 3.0% to stand at $54.85 as of 12:25 p.m. ET. Front month call volume today is heaviest in the May $60 strike calls, with 1,800 contracts in play versus open interest in roughly the same amount. Time and sales data suggests much of the volume was purchased this morning for an average premium of $1.22 apiece. Buyers of the $60 strike calls stand ready to profit at expiration next month should shares in Coinstar, Inc. (NASDAQ:CSTR) rally more than 11% over the current level to top the average breakeven price of $61.22. The May $60 strike calls were also active last week, with around 600 contracts purchased on Friday for an average premium of $1.10 each.

Caitlin Duffy
Equity Options Analyst

The material presented in this commentary is provided for informational purposes only and is based upon information that is considered to be reliable. However, neither Interactive Brokers LLC nor its affiliates warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither IB nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance is not necessarily indicative of future results.

This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities or other financial instruments mentioned in this material are not suitable for all investors. Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue. The information contained herein does not constitute advice on the tax consequences of making any particular investment decision. This material does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation to you of any particular securities, financial instruments or strategies. Before investing, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.