OptionsHouse

Options Trading News

October 9, 2012  Tue 3:16 AM CT

FMCN: SEE CHART GET CHAIN FIND STRATEGIES

Focus Media has been grinding higher, and one investor apparently thinks that it still has room to run.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 2,500 April 28 calls for $0.40 and the sale of an equal number of April 27 calls for $0.75. Volume was below open interest in the April 27s, indicating that an existing position was closed and rolled from one strike to the other.

The investor collected a credit of $0.35 and remains long the Chinese advertising company, which operates digital billboards in mainland cities.

FMCN closed unchanged at $24.27 yesterday. It briefly traded below $18 in July, then started to climb and exploded higher on Aug. 13 after receiving an offer to be taken private. Shares drifted lower in subsequent weeks before bouncing at their 50-day moving average last month.

Calls outnumbered puts by a bullish 4-to-1 ratio on Monday, according to the Heat Seeker.

Share this article with your friends


OptionsHouse

Premium Services

Upcoming Webinar:

Using Options For Income

http://bit.ly/1nY1OKA

Jon Najarian and Adam Mesh of Options Wealth Machine discuss a detailed strategy utilizing credit spreads to generate income, and how any level of trader can use this simple trading technique.

Education & Strategy

The sweet spot

When using the Stock Replacement Strategy, we must remember that in reality, we are doing a STOCK trade. We are just using options. We are replacing the stock position with an option position (long calls).

View more education articles »