OptionsHouse

Options Trading News

April 12, 2013  Fri 9:38 AM CT

GIS: SEE CHART GET CHAIN FIND STRATEGIES
One investor is adjusting a winning trade General Mills, which has gone parabolic this year.

optionMONSTER's Heat Seeker tracking program detected the purchase of 4,000 October 55 calls for $0.26 and the sale of an equal number of October 50 calls for $1.44. Volume was below open interest in the 50s, indicating that an existing position was closed and rolled to the higher strike.

The trader collected a credit of $1.18 and still has the potential to make bigger profits if the food company keeps climbing. He or she probably entered the trade when the shares were lower and has now recovered the initial investment plus some profits. (See our Education section for more on how options can be used to manage positions.)

GIS is up 0.02 percent to $49.27 in morning trading. It spent about three years trapped between $34 and $40 but is up more than 20 percent since escaping that range in early January.

Total option volume is still below average in the stock today, but calls outnumber puts by a bullish 94-to-1 ratio.
Share this article with your friends


Invest Like a Monster - San Diego: June 26-27

Premium Services

Education & Strategy

Investor deficiency in premium collection

Most investors have heard about selling options as a form of income generation. You hear it from brokers and financial advisors as a way to generate income without selling off pieces of your nest egg, dwindling through your retirement accounts, and then being stuck figuring out how to financially afford the rest of your life...

View more education articles »