Options Trading News

July 12, 2013  Fri 3:47 AM CT

Digital Realty is rebounding from a big drop, but traders remain bearish on the stock.

optionMONSTER's Depth Charge tracking program detected the purchase of 5,000 October 60 puts for $2.68 and the sale of a matching number of July 65 puts for $2.19 at the same time. Volume was below open interest in the 65s, indicating that an existing position was closed and rolled to the lower strike.

The transaction cost $0.49 and provides the investor with an additional three months of downside exposure to the company, which owns real estate used for data centers. He or she may be using the contracts to speculate on a drop on the shares or to hedge a long position in the name. (See our Education section)

DLR rose 5.44 percent to $64.58 yesterday but has lost 10 percent of its value in the last three months amid a selloff in real-estate investment trusts.

Total option volume as 12 times greater than average in the name, according to Depth Charge. Puts outnumbered calls by a bearish 44-to-1 ratio.
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I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

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