Options Trading News

June 5, 2013  Wed 11:18 AM CT

Someone thinks that News Corp.'s historic run is over.

optionMONSTER's Depth Charge monitoring system detected the purchase of 3,058 October 27 puts for $0.60 and the sale of an equal number of October 31 calls for $2.30. They collected a credit of $1.70 in the process.

The investor probably owns shares in the media giant, which rallied more than 80 percent between the start of 2012 and last month. He or she has now pledged to sell their stock for $31 if it's above that level on expiration and has locked in a minimum selling price of $27 if it goes below that level. Including the credit earned, they will receive between $28.70 and $32.70 in this collar trade.

NWSA is down 2.88 percent to $31.53 in early afternoon trading. It's enjoyed a steady stream of positive earnings and enthusiasm about plans to split into two companies but has been losing momentum since the last quarterly report a month ago.

Overall option volume is about 50 percent greater than average in the name so far today, with the downside trade accounting for more than half the total.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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