Options Trading News

December 13, 2012  Thu 4:14 AM CT

Whirlpool has been on fire, and one investor thinks there is still gas in the tank.

optionMONSTER's Heat Seeker monitoring system detected the purchase of about 3,800 January 100 calls for $4.58 and the sale of an matching number of December 100 calls for $2.53. Volume was below open interest in the December options but not the January calls, which indicates that an existing position was rolled from one contract to the other.

The transaction cost $2.05 and provides an additional month of upside exposure to the fast-moving appliance maker. Adjusting the trade now lets the investor avoid the quickening time decay that will occur in the shorter-dated calls as expiration approaches at the end of next week. (See our Education section)

WHR rose 1.95 percent to $101.30 yesterday and has appreciated 70 percent in the last six months. The shares have been rallying as the market prices in a stronger housing sector and after the company raised earnings guidance in October.

Total option volume was almost 6 times greater than average in the session, according to the Heat Seeker. Calls accounted for more than three-quarters of the total.
Share this article with your friends


Premium Services

Education & Strategy

The art of trading

As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

View more education articles »