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April 18, 2013  Thu 9:45 AM CT

OIH: SEE CHART GET CHAIN FIND STRATEGIES
A large bearish trade tops today's option activity in the Market Vectors Oil Services Fund even as its shares bounce.

optionMONSTER's Depth Charge system shows that a trader bought 2,600 July 38 puts for $1.32 and, at the same time, sold the same number of July 34 puts for $0.43. The volume at each strike was more than double the strike's open interest before the session began, so this is clearly a new position.

This vertical spread cost the trader $0.89, which is its maximum potential loss. The maximum potential gain of $3.11 would be realized if the OIH is below $34 at expiration in mid-July. (See our Education section)

The OIH is up 0.83 percent to $40 even this morning, a day after seeing its lowest close since the last day of 2012. The exchange-traded fund had climbed above $45 in mid-February.
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Options Academy: Ron's Risk Calculation--A Real Life Example

It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

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