Dow Jones DIAMONDS (DIA), an exchange-traded fund that holds the thirty components of the Dow Jones Industrial Average, November puts saw action on possibe butterfly spread trading. Just before 2:00 ET Thursday, 2,730 lots of November 80, 84, and 88 puts traded. The 84s traded twice. These were the top four trades of the day in DIA. If it is a put fly, the strategist sold the 84s for $3.15, bought half as many of the 80s for $2 and the 88s for $4.86. Total net debit is 56 cents with a potential payoff of $3.44 if the Dow settles at 8,400 at November options expiration (two weeks). The range of profitability is between $87.44 and $80.56, with the debit at risk if DIA falls outside of that range. DIA is up a few pennies to $87.14 in pre-market trading.
Category: All ETFs
About the Author (Author Profile)
Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.