Archipelago Holdings (PCX:AX) operates the Archipelago Exchange (ArcaEx), an open all-electronic stock exchange that handles roughly one quarter of of the total trading volume in Nasdaq-listed securities. The company has also introduced trading platforms and services designed to enhance the speed and quality of trade execution for its customers. In addition to its core execution services, Archipelago provides customers with market data on a real time and on a summary basis, and, as an exchange, it offers issuers a venue to list their equity securities and other structured products.
Shares of Archipelago Holdings soared last week after the company announced plans to merge with the New York Stock Exchange. The deal will combine the 212-year-old manual trading floor with Archipelago's automated systems and make shareholders of the NYSE's 1,366 members. Owners of Archipelago stock will receive 30% of the shares in the new company in a package valued at over $1 billion.
Since the OW Portfolio is currently above the suggested margin/collateral amount, we can not offer this position as an "official" trade recommendation. However, we believe AX has a favorable outlook in the near-term and if one of the current plays (NLS, TKTX) in the portfolio is closed during the coming week, this position may offer a viable substitute for conservative traders. Until that event occurs, it will not be recorded in the OW Portfolio.
Fundamentals Chart Earnings Dates Analyst Ratings
Suggested (Bullish) Option Position:
Sell Put MAY 25.00 AX-QE
Current Price = $0.40 Open Interest = 7
Potential Profit (5 contracts @ $0.40) = $200
Initial Margin (5 contracts) = $3,770
Return on Investment (max) = 6.2%
Cost Basis in Stock = $24.60
Days to Expiration = 26