Trading Education

Trade Idea: EFA Dec 53 Calls — *closed*

The top trade so far today is a block of 75,200 Dec 53 calls on the Europe, Australasia, Far East ETF (EFA) for $1.52 per contract electronically on ISE. An investor bought the block, representing $11.43 million in premium, to open, according to ISEE. It might be tied to a block of 947K EFA shares [...]

July 30, 2012 | 1 Comment More

Case Study: IWM Dec 84 call/72-79 put spread risky – *closed*

CASE STUDY IWM DEC 84 CALL – DEC 72/29 PUT SPREAD RISK REVERSAL iShares Small Cap Fund (IWM) is off 37 cents to $78.95 and one investor seems to be bracing for a deeper pullback, as 25,000 Dec QTRLY 84 calls were sold on the ETF today at $2.25 to buy the 25,000 Dec QTRLY [...]

July 30, 2012 | 0 Comments More

CASE STUDY — FB Dec 15 – 20 Put Spread — *closed*

Judging from the responses from last week’s Facebook (FB) earnings survey, some of you expect the stock price to suffer additional losses throughout the remainder of 2012. FB lost 11.7 percent and fell to new lows of $23.71. Meanwhile, the top options trades on the stock were part of a spread, in which the investor [...]

July 29, 2012 | 1 Comment More

Trade Idea — SINA Jan 57.5 – 62.5 Call Spread — *closed*

An interesting spread was initiated in Chinese Internet company Friday. Shares were up $2.25 to $48.45 on the day, and a January 57.5 – 62.5 call spread traded on the stock for $1.28, 2870X on ISE. The investor bought the 57.5s for $4.10 and sold the 62.5s at $2.82. A customer bought the spread [...]

July 29, 2012 | 0 Comments More

Case Study — XHB Sep 18 – 20 Put Spread — *expired*

SPDR Homebuilder Trust (XHB) was up 23 cents to $21.75 Friday and an investor was building a Sep 18 – 20 put spread on the ETF. The flow was in mixed sized lots, mostly on the International Securities Exchange. The spread was bought a total of 8,165X on ISE. About 33 cents was paid to [...]

July 29, 2012 | 0 Comments More

Long Call Case Study — CLWR Dec 2 Call — *closed*

Clearwire (CLWR) was up 7 cents to $1.08 Friday after releasing earnings yesterday afternoon and one investor might have read something bullish in the report. 28,000 Dec 2 puts are bought on the Bellevue, WA wireless company for 15 cents per contract. Short interest might be buying upside calls. CLWR has lost two-thirds of its [...]

July 29, 2012 | 1 Comment More

CASE STUDY — BTU Jan 30 Long Call — *closed*

The coal space was hot Friday after Arch Coal (ACI) posted earnings that were less grim than analysts feared. ACI is up 24 percent. Alpha Natural Resources was the subject of a bullish combination trade (see today’s ANR color.) Meanwhile, Peabody Energy (BTU) is up 56 cents to $20.17 and recent trades on the stock [...]

July 29, 2012 | 0 Comments More

Slick Play on Exxon

Exxon Mobile (XOM) is off $2.47 to $82.50 after crude lost more than $2.50 and fell to less than $79 per barrel Thursday. Crude is now at its lowest levels since early-October and has plummeted nearly 30 percent since late-April. One player in the options market made a well-timed bet in anticipation of weakness in [...]

June 21, 2012 | 0 Comments More

Microsoft Corp (MSFT) $30.74 +3.03%

Microsoft (MSFT) adds 92 cents to $30.75 and is the second best gainer in the Dow behind BofA today. Trading is active, with 59 million Microsoft shares and 287,000 MSFT options changing hands after the company unveiled it’s new windows-based “Surface” tablet. Options order flow on the software giant so far includes 201,000 calls and [...]

June 19, 2012 | 0 Comments More

Plain Vanilla Call Spread

A fellow stockbroker introduced me to options trading in the early-90s. I was a rep for a regional firm and he showed me how he created vertical call spreads on stocks that were possibly due to announce stock splits. The idea was to make money on the call spread from the move higher in the [...]

June 18, 2012 | 0 Comments More