Heavy trading traffic in Express Inc (EXPR) options as shares zip higher

Walgreen Company (NYSE:WAG) – A three-legged options combination trade initiated on pharmacy operator, Walgreen Company (NYSE:WAG), this morning appears to be a bullish bet that makes money as long as shares in the name post limited gains during the next three months. Shares in Walgreen Company (NYSE:WAG) are roughly flat on the session, up 0.10% at $39.08 as of 11:15 a.m. ET. The largest transaction in Walgreen options combines the sale of out-of-the-money put options with the purchase of a bull call spread. The strategist responsible for the position appears to have sold 2,000 puts at the April $35 strike for a premium of $0.43 apiece, and purchased a 2,000-lot April $40/$42 call spread at a premium of $0.565 each. All told, the options spread cost a net premium of $0.135 per contract and positions the trader to make money in the event that Walgreen shares rally at least 2.7% during the next few months to surpass the breakeven point at $40.135. The trade could result in maximum potential profits of $1.865 per contract given a 7.5% upside move in Walgreen Company (NYSE:WAG) shares to $42.00 by April expiration.

Caitlin Duffy

Equity Options Analyst

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