Options Trading News

February 10, 2014  Mon 12:20 PM CT

A large trader is hoping for a good number when Angie's List reports earnings this week.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 4,630 February 20 calls for $0.60 and the sale of an equal number of February 22.50 calls for $0.20 today. Volume is above the previous open interest at each strike, indicating that new positions were initiated.

Known as a bullish call spread, the trade cost $0.40 and will generate a profit of 525 percent if the heavily shorted Internet stock closes at $22.50 or higher on expiration. (See our Education section for more on the trade, which lets the investor position for a rally with limited risk.)

ANGI is down 1.37 percent to $17.23 in afternoon trading. The consumer-review service cratered in early October after lowering membership fees, drifted as low as $11.88 in late November, and has been rebounding since. Quarterly results are scheduled to be announced on Wednesday afternoon.

Total option volume in ANGI is quadruple its daily average so far in the session, according to the Heat Seeker. Overall calls outnumber puts by more than 17 to 1.
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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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