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September 27, 2013  Fri 11:01 AM CT

BYD: SEE CHART GET CHAIN FIND STRATEGIES
Boyd Gaming has seen its share price double this year, and traders are betting that the casino operator will hold current levels.

More than 3,000 October 14 puts have been sold today, almost all of them going for $0.50. Open interest in the strike was just 640 contracts before the trades appeared, indicating that hese are new positions.

These put sellers are looking for BYD to stay above $14 through expiration in three weeks. If the stock falls below that strike price, they will be on the hook to buy shares at that level. (See our Education section)

BYD is down 1.16 percent to $14.10 in midday trading. The stock has more than doubled since beginning 2013 at $7 but is facing a resistance level encountered in mid-May.
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Education & Strategy

Sweet Spot Exceptions

As discussed last week, when using the Stock Replacement Strategy to replace a stock position to trade direction, we want to use an option that has very similar characteristics to the stock. We talked about using the deep in-the-money, 80 to 85 delta option that is similar in the Greeks and has relatively little extrinsic value which tends to work against us in stock directional trading.

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