Stocks quoted in this article:
United Parcel Service (UPS – 60.06) came forth with some encouraging fundamental news today, announcing plans to boost the dividend in its Class A and Class B shares by 12 percent. Company officials cited strong cash flow and continued earnings growth as the reasons behind this change. The shares are virtually unchanged in early-afternoon trading.
The equity has had little direction for nearly a year; since mid-March, UPS has traded sideways in a range between the 55 and 65 levels. This consolidation pattern has made moving-average trendlines fairly meaningless. On the options front, it appears as though speculators look for the stock to break free of its range … though not for a while. Open interest on UPS calls is relatively hefty at the out-of-the-money 65, 60, and 75 strikes in the July series. Also, the site of heaviest call open interest is the January 2003 70 strike, home to nearly 10,000 open call contracts. By contrast, the site of heaviest put open interest is the July 60 option, where 4,146 contracts currently reside.