AT&T (T) has added 45 cents to $34.28 and is one of 21 Dow stocks helping the industrial average to a modest 5-point gain. Shares are moving to new 52-week highs after a 13.4 percent year-to-date advance. An investor might be looking to hedge recent gains with a spread, as 12,500 Aug 32 puts were bought on T for 55 cents and 25,000 Aug 29 puts sold at an averge of 20.5 cents. The 1X2, for a 13-cent debit, traded on ISE, where ISEE reports an opening position for a customer account. It doesn’t appear tied to stock and the spread will offer its best payoff if shares settle at $29 (~15,5%) at the August expiration (78 days).
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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.