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Option Brief: Autodesk, Inc. (NASDAQ:ADSK) is sitting comfortably in the green this afternoon, thanks to an earnings-induced halo lift from sector peer Adobe Systems Incorporated (NASDAQ:ADBE). However, today's 3% pop only highlights the equity's withstanding technical prowess, with the shares up more than 58% year-over-year to trade at $56.27. This isn't enough to quell today's options traders, though, who are rolling the dice on a near-term rally to record highs.
Taking a step back, calls are trading at nearly seven times the intraday average this afternoon, and are outpacing puts by a 4-to-1 margin. Short-term options are in high demand, as evidenced by the equity's 30-day at-the-money implied volatility (IV), which is up 7.4% to 30.5%. The most active contract is ADSK's July 60 call, where 10,968 contracts have crossed the tape -- mostly at the ask price, pointing to buyer-driven volume. Plus, IV is trending higher at the strike, and volume is easily outstripping open interest, making it safe to assume that new bullish bets are being initiated.
While a move north of the round-number $60 mark would represent record-high territory for ADSK, the call buyers need the equity to finish north of $60.77 (strike plus the volume-weighted average price of $0.77) at the close on Friday, July 18, in order to profit. Gains are theoretically unlimited with each step above this breakeven mark Autodesk, Inc. (NASDAQ:ADSK) lands at back-month options expiration, while losses are capped at 100% of the premium paid. Considering the stock's Schaeffer's Volatility Index (SVI) of 29% ranks lower than 85% of similar readings taken in the past year, these call buyers can rest easy knowing they scooped up these short-term options at a relative bargain.