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October 25, 2013  Fri 10:52 AM CT

OLN: SEE CHART GET CHAIN FIND STRATEGIES
Olin has fallen in recent months but is attracting bullish option activity before its earnings report next week.

More than 2,100 December 25 calls were purchased for $0.20 to $0.29 this morning, according to optionMONSTER's Heat Seeker tracking system. These are clearly new positions, as open interest in the strike was a mere 15 contracts before the trades appeared.

These long calls lock in the price where traders can buy the stock through mid-December no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, but they will expire worthless if shares remain below $25. (See our Education section)

OLN is down 1.22 percent to $21.87 in midday trading. The ammunition and chemical company, which includes the Winchester brand, has pulled back since trading above $25 in early August and has been unable to break back above its 50-day moving average since then.

Management is scheduled to release third-quarter results on Monday after the close.

Total option volume in OLN tops 3,200 contracts so far today, already more than 6 times its daily average for the last month. Calls outnumber puts by a bullish ratio of 13.5 to 1.
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Education & Strategy

The Strike-Based Greeks

The other Greeks (Gamma, Vega, and Theta) are calculated by using month and strike data, and not by individual option. These are called strike-based Greeks. Gamma, Theta, and Vega are all strike-based Greeks

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