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E I Du Pont De Nemours And Co (NYSE:DD) is benefiting from broad-market tailwinds today, with the shares up around 1.7% at last check. The move higher has sparked a rush of call activity in the stock's options pits, with the contracts trading at almost 22 times the average intraday pace. Nearly all of the day's call volume has centered on the September 67.50 strike, as traders roll the dice on extended gains for the blue chip.
Drilling down, the majority of the 24,217 contracts traded at this out-of-the-money strike have done so at the ask price. Plus, implied volatility has edged higher, and only 2,134 contracts are currently in residence here. Plus, Trade-Alert confirms that new calls are being purchased at this strike today.
Based on the volume-weighted average price (VWAP) of $0.65, breakeven for the call buyers at the close on Friday, Sept. 19 -- when back-month options expire -- is $68.15 (strike plus VWAP). Gains will accumulate with each additional step north of here, while losses are capped at the initial premium paid, should DD finish south of the strike at expiration.
On the charts, E I Du Pont De Nemours And Co (NYSE:DD) has done well over the long term, with the shares up roughly 60% from their November 2012 lows near $42. More recently, however, the stock has been churning in the $64.50-to-$66.50 neighborhood, after gapping lower in late June following tepid earnings guidance. Although today's positive price action temporarily sent DD through the upper end of this range, the equity has since pared a portion of these earlier gains to trade at $66.43.