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August 16, 2013  Fri 2:45 AM CT

AKS: SEE CHART GET CHAIN FIND STRATEGIES
A large trader is betting that AK Steel will stay range-bound in the long term.

More than 16,000 AKS options traded yesterday, quadruple its daily average for the last month. Dominating that action were the January 2015 3 puts.

A trader sold a block of 10,000 of those contracts for the bid price of $0.83, according to optionMONSTER systems. That was done against previous open interest of 1,289, clearly showing that it is a new position.

Just after that trade, a block of 260,000 AKS shares was sold for $3.55. Combined with the short puts, this creates an overall position a delta-neutral play that is looking for lower volatility. (See our Education section)

AKS slipped 0.82 percent to $3.62 yesterday. Shares of the steel producer were at support around $3 a month ago but finished Monday at their highest close since mid-March.
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Education & Strategy

The Strike-Based Greeks

The other Greeks (Gamma, Vega, and Theta) are calculated by using month and strike data, and not by individual option. These are called strike-based Greeks. Gamma, Theta, and Vega are all strike-based Greeks

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