M&A Optimism Draws CBRE Group, Inc. (CBG) Option Bulls

CBRE Group Inc (CBG) call options are active amid M&A headlines

Mar 31, 2015 at 2:14 PM
facebook twitter linkedin

Commercial real estate concern CBRE Group Inc (NYSE:CBG) is defying broad-market headwinds, and option traders today are gambling on even higher highs for the stock. At last check, the equity was up 6.3% at $38.69 -- and earlier notched a seven-year peak of $38.99 -- on news of a planned $1.48 billion purchase of a Johnson Controls Inc (NYSE:JCI) unit.

CBG calls are trading at four times the average intraday pace, and have more than quadrupled puts thus far. In light of the news and subsequent rally, the equity's 30-day at-the-money implied volatility has popped 18.4% to 24.7% -- higher than three-quarters of all other readings from the past year.

Specifically, CBG has already seen more than 1,000 calls cross the tape. To put things in perspective, fewer than 6,000 total CBG calls are currently open right now. Most popular is the April 39 call, which traders are buying to open to bet on a move north of $39 by the close on Friday, April 17, when front-month options expire. Amid the security's rally, delta on the call skyrocketed to 0.45, from 0.045 at yesterday's close, indicating a roughly 45% chance of expiring in the money.

Even before today's M&A headlines -- shared with this media firm -- CBRE Group Inc (NYSE:CBG) was on the rise, boasting a year-over-year gain of nearly 33%. In fact, the security was exploring multi-year highs just last week. As such, it's not surprising to find most of Wall Street already in the bulls' corner. Short interest accounts for less than 1% of CBG's total available float, and all four analysts covering the shares consider them worthy of a "strong buy."


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 


300x250 - Banner 3 - v1