Reynolds American, Inc. (RAI) manufactures and sells various tobacco products. RAI is trading at the upper end of the 52-week range of $55.22-$77.68 around $76.94. Year to date the stock has performed fairly well appreciating by almost 20%. Today RAI has been weak, selling off by $0.57 or .74%. About an hour after the open an unusually large bullish options bet hit the tape.

Initially a trader bought 4,054 of the RAI June 80.0 Calls for $0.65 when the stock was trading at $76.65. As one of the first few recordings on OptionsHacker, the stock drove a few cents higher, but fell a few minutes later reaching a trough at $76.52. Over 8,400 of those contracts have been traded. Although the stock is down $0.57 the call premiums rose by about $0.10.

Trade: A trader bought 4,054 of the RAI June 80.0 Calls for $0.65
Risk: $65 per lot
Reward: Unlimited
Breakeven: $80.65

The stock moved higher after these calls hit the tape and the calls moved with it. They have traded as high as $0.75 today meaning a trader could have netted a $200 profit on a 20 lot.

Andrew Keene


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