Options Trading News

March 21, 2014  Fri 12:21 PM CT

One investor wants to stick with American Realty Capital as the shares rebound from a pullback earlier this month.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 4,293 January 12.50 calls for $1.80 and the sale of an equal number of March 12.50 calls for $1.25. Volume was below open interest in the nearer-dated contracts, which expire today, so this appears that an existing long position was closed and rolled forward in time.

Making the adjustment cost $0.55 and gives the investor an additional 10 months of upside exposure with leverage potential through the options. It also prevented him or her from being assigned shares at expiration today. This way, the investor can sit easy knowing that a rally won't be missed while limiting the amount of capital at risk. (See our Education section)

ARCP is up 1.95 percent to $14.10 in afternoon trading. The owner of retail buildings climbed about 20 percent between December and early this month but has been falling in the last two weeks. It's now attempting to bounce at its October highs, which could make some chart watchers think that the uptrend remains intact.

Total ARCP option volume is triple its daily average so far today, with calls outnumbering puts by more than 25 to 1. The stock also saw long-term bullish activity on Feb. 12.
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I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

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