Buy-Write Strategist Sinks Teeth into Apple Call Options

Today’s tickers: AAPL, AUXL, CSX, CTRP, SNDK, CPB & SLV AAPL - Apple, Inc. – Options investors fluttered about the iPhone maker today populating the stock with various trading strategies and exchanged more than 234,000 contracts on the stock by 3:40 pm (ET). Apple’s shares are up 0.40% to stand at $247.95 with the final bell set to ring in approximately 15 minutes, but earlier in the session the stock rallied as much as 2.37% to touch an intraday high of $252.80. One strategist expecting the price of the underlying stock to increase sharply ahead of July 16 expiration day initiated a buy-write transaction today. It looks like the investor sold roughly 1,300 calls at the July $280 strike for an average premium of $6.00 apiece and simultaneously purchased Apple shares at an average price of $251.90 each. The premium received for writing the call options effectively reduces the average price paid to purchase shares of the underlying stock to $245.90 apiece. Thus, the covered call strategy positions the investor to walk away with maximum gains of 13.87% should Apple’s shares trade above $280.00 at expiration. Shares of the iPad manufacturer have not exceeded $279.01 in the past 52-weeks. But, the bullish player certainly reduced the cost of getting long Apple shares and is positioned to benefit nicely from upward momentum in the price of the underlying stock whether or not shares are called from him at expiration day in July. AUXL - Auxilium Pharmaceuticals, Inc. – Shares of the specialty biopharmaceutical company fell as much as 6.85% during the trading session to attain a new 52-week low of $19.99. AUXL’s shares declined following a downgrade to ‘perform’ from ‘outperform’ at Oppenheimer this morning, and are currently down 4.3% to close the trading day at $20.54. The decline in Auxilium’s shares today inspired one options investor to purchase a plain-vanilla debit put spread on the stock. The trader purchased 2,000 now deep in-the-money puts at the July $22.5 strike for a premium of $2.85 apiece, spread against the sale of the same number of puts at the lower July $20 strike for a premium of $1.20 each. The net cost of the transaction amounts to $1.65 per contract, thus positioning the bearish player to accrue maximum potential profits of $0.85 per contract if shares of the underlying stock trade below $20.00 by July expiration day. CSX - CSX Corp. – The provider of rail-based transportation services…