Schaeffer's Options Center
Sponsored by:
Schaeffer's Daily Option Blog

Bullish Analysts, Option Traders Target Illinois Tool Works

Speculators are scooping up ITW's March 57.50 call

by 2/1/2012 2:33 PM
Stocks quoted in this article:

The shares of Illinois Tool Works Inc. (ITW - 54.93) have extended yesterday's earnings-inspired rally, thanks to a couple of bullish brokerage notes. Specifically, Jefferies upped its price target on the equity to $62 from $55, while Wells Fargo lifted its current-year and 2013 earnings expectations for the company. What's more, it looks like a slew of options speculators are betting on even more upside for the equity.

So far today, ITW has seen roughly 9,800 calls cross the tape -- nearly twice the number of puts traded, and around four times the stock's average daily volume. Most popular has been the March 57.50 call, which has seen close to 2,300 contracts change hands on open interest of fewer than 550, pointing to an influx of new positions. Plus, the majority of the out-of-the-money calls have traded at the ask price, suggesting they were bought. By purchasing the calls to open, the investors are expecting ITW to conquer the $57.50 level within the next couple of months.

From a broader sentiment standpoint, today's preference for calls stands in stark contrast to the growing trend. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock sports a 10-day put/call volume ratio of 2.02, indicating that traders have bought to open more than two ITW puts for every call during the past couple of weeks. Furthermore, this ratio registers in the 88th annual percentile, hinting at a healthier-than-usual appetite for bearish bets over bullish of late.

In afternoon action, ITW has added 3.6% to explore the $54.93 level. What's more, the stock is on pace to end the week atop former support in the $54 region for the first time since mid-July.


Featured Brokers
Unusual Option Volume
Option Flow
Most Active Stocks
Most Active Option Strikes
Largest Open Interest

Partner Center

© 2015 Schaeffer's Investment Research, Inc. 5151 Pfeiffer Road, Suite 250, Cincinnati, Ohio 45242 Phone: (800) 448-2080 FAX: (513) 589-3810 Int'l Callers: (513) 589-3800 Email:

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

Market Data provided by | Data delayed 15-20 minutes unless otherwise indicated.