Xerox Options Cheap Amid Fujifilm Rally

Carl Icahn has been pushing for new leadership at XRX

Jan 11, 2018 at 9:54 AM
facebook X logo linkedin

Xerox Corp (NYSE:XRX) is reportedly in talks to team up with Japanese camera maker Fujifilm Holdings. According to the Wall Street Journal, the copy specialist is under pressure from Carl Icahn -- its largest stakeholder -- to modernize, with the activist investor warning in an open letter to shareholders last December that XRX could end up like Eastman Kodak. And while the two companies have been in a joint photocopy venture for more than five decades, speculation surrounding the latest deal includes rumors of new leadership at Xerox.

The rumors are being well received on Wall Street, with XRX stock up 4.5% to trade at $31.71. Since skimming its most recent low of $27.55 in mid-November, XRX stock has added 15%. Analysts, meanwhile, expect the stock to surge to levels not seen since early 2015, with the security's average 12-month price target docked at $37.31 -- a 17.5% premium to Xerox stock's current price.

The shares have certainly been prone to big moves in recent months, though, per XRX's 60-day historical volatility of 23.1% -- docked in the 73rd annual percentile. This has created an attractive opportunity for premium buyers, too, per XRX's Schaeffer's Volatility Scorecard (SVS) of 86. In other words, Xerox has consistently made bigger-than-expected moves over the past year, relative to what the options market has expected.

Along those lines, XRX options are cheap right now. The stock's Schaeffer's Volatility Index (SVI) of 17% ranks in the 2nd annual percentile, meaning low volatility expectations are currently being priced into short-term contracts.


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI