Does Walgreen Have the Right Prescription?
"Fast Money" Contributor
is starting to find some mojo, and upside option activity is picking up in the name.
The stock broke lower almost a year ago, but in the last few days it’s been moving up to multimonth highs. UBS also added WAG to its “most preferred” list, betting the drugstore chain would resolve its disputes with Express Scripts. And now the Walgreen’s chief financial officer is scheduled on April 24 to discuss the company’s strategies for becoming the country’s first choice for health and daily living.
Trading was heavy yesterday in the May contracts, especially the May 37 calls. More than 5,000 of those changed hands in sizable blocks for $0.55 to $0.67, according to OptionMonster’s real-time tracking systems. The May 35 calls and May 36s were busy, as well.
Those contracts lock in the price investors must pay to own the stock. They can deliver significant leverage if Walgreen rallies, but also run the risk of losing some of all their value if the stock doesn’t move.
Walgreen’s shares rose 1.25 percent to $35.51 Wednesday.
Almost 36,000 calls traded versus 16,000 puts. Total option volume in the name was twice its daily average.
—Najarian has no positions in WAG.
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