Options Trading News

September 24, 2013  Tue 10:01 AM CT

Vodafone is at its highest level in more than five years, and one trader is looking for even more gains.

optionMONSTER's Heat Seek system shows that 2,000 November 34 calls were bought for $0.90 this morning. This is clearly a new position, as open interest in the strike was just 72 contracts before the trade appeared.

These long calls lock in the price where the stock can be purchased for the next two months no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, but the contracts will expire worthless if shares are below $34 in mid-November. (See our Education section)

VOD is up 0.67 percent to $33.94 this morning as shares trade at their highest levels since February 2008. The U.K. telecom carrier gapped up from below $30 in late August on its intent to sell its 45 percent stake in Verizon, and VOD has been rising since.

Overall VOD calls outnumber puts by more than 2 to 1 so far today. 
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 »