OptionsHouse

Options Trading News

August 30, 2013  Fri 10:59 AM CT

VZ: SEE CHART GET CHAIN FIND STRATEGIES

Verizon Communications popped higher yesterday, but the bears see more downside into yearend.

optionMONSTER's Depth Charge monitoring system detected the purchase of 6,000 December 46 puts for $1.63 and the sale of an equal number of December 45 puts for $1.36. Volume was more than twice open interest at both strikes, indicating that a new vertical spread was initiated.

It cost $0.37, which is the maximum potential loss on the spread. The maximum gain of $0.63 would be realized if shares are below $45 at expiration. (See our Education Section for more.)

VZ fell 0.87 percent to $47.41 in late morning trading. Shares touched their lowest levels since the start of March earlier this week, but leapt yesterday on news the company may take complete control of its Verizon Wireless subsidiary.

The stock peaked above $54 in late April, and was up against resistance at $52 as recently as the last day of July.

Total option volume is twice the daily average so far today, according to Depth Charge.

Share this article with your friends


Related Stories

VZ

How call buyers are dialing into Verizon

April 26, 2016

The wireless carrier reported bearish quarerly results last Thursday, but traders are betting on a rally after the summer.

OptionsHouse

Premium Services

Education & Strategy

Market Level Making You Nervous, Huh? Part 3

In last week's article, we discussed how important the extra cash you save by using the Stock Replacement Strategy over buying the actual stock is! That extra cash in our account instead of being unnecessarily tied up in a stock position allows us to buy the puts we would need to protect our downside in the case of a major sell-off.

View more education articles »