Ameritrade’s (AMTD) owners want the company to partner with “one of its industry peers.” Two heavily invested hedge funds, JANA Partners and S.A.C Capital Advisors, are calling for the change. Their combined ownership amounts to about 8.5%, or around 50 million shares, of the company’s outstanding stock.
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TD Ameritrade (AMTD) officials announced Wednesday they are ready for a possible merger. Katrina Becker, a spokeswoman for the company, said, “It is absolutely accurate to say that we have been and are talking with peers in the industry.” She went on to explain the move would fit into the company’s long-term strategy, “We believe there’s going to be additional consolidation in the industry. We have an organic growth strategy and an external strategy.”
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Ameritrades shares rose 76 cents, or 3.8 percent, Wednesday. This marked a 52-week high for the stock.
Who would be the potential suitor? Charles Schwab (SCHW) has indicated it is not interested in a deal with Ameritrade. E*Trade and Bank of America both seem as though they might have an interest in acquiring the company. However, reports have indicated Ameritrade’s board has some trepidation regarding an alignment with E*Trade (ETFC). This leaves Bank of America (BAC) as a prime suspect. Bank of America currently offers free online trades for certain account holders and the idea of owning TD Ameritrade may fit well into their strategic vision.
Although nothing is certain regarding the rumors surrounding Ameritrade, the PowerOptions weblog would like to take this opportunity to take a look at attractive option trades involving the financial companies mentioned above. This will give you an idea of how, after identifying attractive stocks, you can easily identify attractive option trades using PowerOptions‘ powerful online search tools.
Additional Information:
As a note, PowerOptions has trading experts available to help investors more fully understand the option trading process. They can be reached, toll free, at 877-992-7971. There are additional resources on the PowerOptions website for investors to learn more about the fun and exciting world of option investing. The following links, Help with Options, How to Write Covered Calls and Investing in Options are all great resource articles to help you get the hang of options trading.
Potential Trades:
The following option trades, have 45 days until expiration. These trades were discovered using the powerful suite of option search tools found at PowerOptions.
| PowerOptions covered call Ameritrade Merger Rumors (45 days) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Sym |
Stock Price |
OPTION | Strike Info |
Opt Bid |
% Dnsd. Prot. |
% If Unch. |
% If Asgnd |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| AMTD | $20.71 | TQAGD | 07 JUL $20.00 | $1.60 | 7.70% | 4.70% | 4.70% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHW | $21.80 | SHQGX | 07 JUL $22.50 | $0.70 | 3.20% | 3.30% | 6.60% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ETFC | $25.60 | EUSGE | 07 JUL $25.00 | $1.65 | 6.40% | 4.40% | 4.40% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BAC | $50.33 | BACGJ | 07 JUL $50.00 | $1.40 | 2.80% | 2.20% | 2.20% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMTD – The Ameritrade trade involves the July $20 call option and offers 7.7% downside protection and 4.7% potential profit if the stock is above the $20 strike price at the end of the option period.
Competitors for AMTD include: Charles Schwab Corp. (SCHW), E*TRADE Financial Corp. (ETFC), FMR Corp. (private), Etrade Group Inc. (ET), and Trade Station Group Inc. (TRAD).
SCHW – The Charles Schwab trade involves the July $22.50 call option and offers 3.2% downside protection and 6.6% potential profit if the stock is above the $22.50 strike price at the end of the option period.
Competitors for SCHW include: E*TRADE Financial Corp. (ETFC), FMR Corp. (private), The Jones Financial Companies, L.L.L.P. (private), Ameritrade Hldg. Corp. Class A (AMTD), Etrade Group Inc. (ET), and Trade Station Group Inc. (TRAD).
ETFC – The E*Trade trade involves the July $25 call option and offers 6.4% downside protection and 4.4% potential profit if the stock is above the $25 strike price at the end of the option period.
Competitors for ETFC include: Charles Schwab Corp. (SCHW), TD AMERITRADE Holding Corporation (AMTD), and FMR Corp. (private).
BAC – The Bank of America trade involves the July $50 call option and offers 2.8% downside protection and 2.2% potential profit if the stock is above the $50 strike price at the end of the option period.
Competitors for BAC include: Citigroup Inc. (C), Wachovia Corp. (WB), Wells Fargo & Co. (WFC), BB&T Corp. (BBT), BankAtlantic Bancorp (BBX), Banknorth Group Inc. (BNK), Boston Private Fin. Hldgs. Inc. (BPFH), Countrywide Financial Corp. (CFC), Comerica Inc. (CMA), Capital One Financial Corp. (COF), City National Corp. (CYN), East West Bancorp Inc. (EWBC), FirstFed Financial Corp. (FED), First Horizon National Corp. (FHN), Fremont General Corp. (FMT), Greater Bay Bancorp (GBBK), J.P. Morgan Chase (JPM), Mercantile Bankshares Corp. (MRBK), NewAlliance Bancshares Inc. (NAL), Peoples Bank (PBCT), Regions Financial Corp. (RF), SVB Financial Group (SIVB), SLM Hldg. Corp. (SLM), Sun Trust Banks Inc. (STI), Temple-Inland Inc. (TIN), South Fin. Grp. Inc. (TSFG), Union Bank of California Corp. (UB), U.S. Bancorp (USB), Westamerica Bancorp (WABC), Washington Mutual Inc. (WM), and Zions Bancorp. (ZION).
For more information about how to identify and research great option trades, visit the PowerOptions website. There you will find the data you need to make quick, clear, and informed decisions. You can trade knowing you have found the best investment. Also, PowerOptions will allow you, with a few quick clicks, to quickly and accurately compare trades. PowerOptions‘ premium customer support is second to none in the industry. They can be easily contacted when you need them at their toll-free number to answer customer questions. Call them now toll free at 877-992-7971.
PowerOptions provides a free 14-day trial of its service. So join PowerOptions today, and you too can start reaping the benefits of the covered call investment strategy.
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[tags] JANA Partners, S.A.C Capital Advisors, Katrina Becker, FMR Corp., The Jones Financial Companies, L.L.L.P., AMTD, Ameritrade Hldg. Corp. Class A, BAC, BankAmerica Corp., BBT, BB&T Corp., BBX, BankAtlantic Bancorp, BPFH, Boston Private Fin. Hldgs. Inc., C, Citigroup Inc., CFC, Countrywide Financial Corp., CMA, Comerica Inc., COF, Capital One Financial Corp., CYN, City National Corp., ETFC, E*Trade Financial Corp., EWBC, East West Bancorp Inc., FED, FirstFed Financial Corp., FHN, First Horizon National Corp., FMT, Fremont General Corp., GBBK, Greater Bay Bancorp, JPM, J.P. Morgan Chase, NAL, NewAlliance Bancshares Inc., PBCT, Peoples United Fin. Inc., RF, Regions Financial Corp., SCHW, Charles Schwab Inc., SIVB, SVB Financial Group, SLM, SLM Hldg. Corp., STI, Sun Trust Banks Inc., TIN, Temple-Inland Inc., TRAD, Trade Station Group Inc., TSFG, South Fin. Grp. Inc., UB, Union Bank of California Corp., USB, U.S. Bancorp, WABC, Westamerica Bancorp, WB, Wachovia Corp., WFC, Wells Fargo & Co., WM, Washington Mutual Inc., ZION, Zions Bancorp., covered call investment strategy, help with options, how to write covered calls, investing in options, investment strategy, iron condor, option investing, options trading, poweroptions, stock option trading, stock options [/tags]