OptionsHouse

Options Trading News

August 22, 2013  Thu 4:14 AM CT

ITB: SEE CHART GET CHAIN FIND STRATEGIES
The iShares U.S. Home Construction Fund is facing a large bearish position.

optionMONSTER systems show that 10,000 each of the October 17 and 21 puts traded yesterday. The 21 puts were bought for $0.98 and the 17 puts were sold for $0.08. Both traded well above previous open interest at their respective strikes, clearly indicating new activity.

This vertical spread cost the trader $0.90, which is the maximum risk if ITB remains above $21. The maximum potential gain is $3.10 if the stock is below $17 at that time. (See our Education section)

The ITB was down fractionally at the end of the day to $21.24. The exchange-traded fund has been trending downward from above $26 in May and reached their lowest levels of 2013 last week.
Share this article with your friends


OptionsHouse

Premium Services

Archived Webinar

Education & Strategy

Using synthetic positions vs. actual stock

We now know as absolute fact that a synthetic position is 100% identical to its real position counterpart. It is simply a function of mathematics. So, if they are totally identical then why would a trader ever use the synthetic alternative over the real position?

View more education articles »