Trading Education

Finding Trades

No two options traders are exactly alike, but most of us share a lot in common. Obviously, we all want to succeed in options trading. What does that mean? The simple answer: make money! However, we all have our own ideas of what it means to be a successful options investor. For one person, success [...]

February 11, 2013 | 0 Comments More

CASE STUDY: VRNG DEC 3 – 4 SHORT STRANGLE — *closed*

Vringo (VRNG) shares are up 14 cents to $3.52 and one player bought 700 Nov 6 calls on the New York-based app software developer at 2 cents and sold 700 Dec 3 – 4 strangles at 70 cents. The spread has traded 1400X and probably rolls a position from Nov 6 calls to a new [...]

November 12, 2012 | 0 Comments More

CASE STUDY: Yahoo Oct 14 – 16 Bullish Risk-Reversal — *expired*

Yahoo (YHOO) adds 17 cents to $15.06 and an Oct 14 – 16 bullish risk-reversal trades on the Internet giant at 4 cents, 48000X on ARCA. Puts were sold to buy calls. Doesn’t look tied and, while open interest is sufficient to cover, this looks like a new position (stock exactly midway between two strikes [...]

September 5, 2012 | 0 Comments More

CASE STUDY: LCC Dec 12 – 15 Call Spread – *closed*

US Airways (LCC) adds 2 cents to $10.09 and a Dec 12 – 15 call spread trades on the airliner for 57 cents, 9000X on ISE. A customer bought the spread, to open, according to ISEE data. LCC hit a 52-week high of $14.51 one month ago today, but is down 30.5 percent since that [...]

August 13, 2012 | 0 Comments More

CASE STUDY: EEM Sept 42 – 43.5 – 45 Call Butterfly Spread — *expired*

The largest options trades so far today are in the iShares Emerging Markets Fund (EEM). Shares are up 38 cents to $40.75 and a Sep 42 – 43.5 – 45 call butterfly trades on the ETF for 22 cents, 40000X electronically on ISE. Data from the ISE is reporting the fly was bought, to open; [...]

August 9, 2012 | 0 Comments More

CASE STUDY: MetLife Inc (MET) Bull Call Spread Risk-Reversal — *expired*

A second day of impressive spread trading in MetLife (MET). Like yesterday, an investor is selling Dec 30 puts on the New York-based insurance company to buy the Dec 35 – 40 call spread, for 25 cents, electronically on ISE. Yesterday’s activity created almost 30,000 in new open interest in all three contracts — making [...]

August 8, 2012 | 0 Comments More

CASE STUDY: SPY Put Butterfly Spread — *expired*

SPDR 500 Trust (SPY) is up 73 cents to $140.08 on share volume that is running less than half the normal. 56.5 million SPY shares traded so far, which puts it on pace to be one of the lightest in recent memory (52-week low volume is 80.45 million set on July 3). Options volume is [...]

August 6, 2012 | 0 Comments More

CASE STUDY: Citi Oct 27 – 30 Call Ratio Spread — *exercise/assignment*

Citi (C) loses 70 cents to $26.07 and an Oct 27 – 30 (1X2) call ratio spread trades on the bank today for 46 cents, 4000X, to open. Citi is sliding today, but has been rangebound for more than two months and is at the same levels today as late-May. In fact, the stock is [...]

August 2, 2012 | 0 Comments More

CASE STUDY — ANR Jan 4 – 8 Bullish Risk Reversal — *closed*

Alpha Natural Resources (ANR) is off morning lows of $6.48 and now up a penny to $7.01. The Jan 4 – 8 bullish risk-reversal on the coal producer is seeing interest again today. Nearly 25,000 traded Friday (see 7/27 color). Today, another 7,500 were bought to open on ISE, according to ISEE data, and 6,000 [...]

August 1, 2012 | 0 Comments More

CASE STUDY: DNDN Nov 4 – 7 Short Strangle — *closed*

Dendreon (DNDN) lost $1.42 to $4.76 today after posting a hefty 61-cent per share loss, four cents worse than expected, and then getting hit with multiple analyst downgrades. In options action, one investor bought 10,000 Aug 6 – 7 strangles on the biotech for $1.36 this morning and sold 10,000 Nov 4 – 7 strangles [...]

July 31, 2012 | 0 Comments More
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