OptionsHouse

Options Trading News

September 5, 2013  Thu 2:45 AM CT

BBY: SEE CHART GET CHAIN FIND STRATEGIES
Best Buy is trading at its highest levels since 2010, but a large position is looking for a pullback by the end of this year.

optionMONSTER's Depth Charge system shows that a trader bought 5,000 December 40 puts for the ask price of $0.88 and sold 10,000 December 23 puts for $0.14. Volume was far above the previous open interest at each strike, indicating that this is new positioning.

The trade, known as a ratio spread because twice as many contracts were sold than bought, cost $0.60 to open, which is the maximum amount at risk if BBY remains above $30. The maximum gain would come with the stock down at $23 at expiration in mid-December. (See our Education section)

BBY gained 0.51 percent to $37.14 yesterday after peaking at $37.98 earlier in the session. These are the electronics retailer's highest levels since 2010. Shares have climbed from a low of $11.20 at the very end of 2012.  

More than 36,000 BBY options traded in total yesterday, compared to a daily average of 16,000.
Share this article with your friends


Invest Like a Monster - San Antonio: October 9-10

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Archived Webinar

Education & Strategy

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.

View more education articles »