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December 11, 2012  Tue 3:16 AM CT

HYG: SEE CHART GET CHAIN FIND STRATEGIES
The iShares High-Yield Corporate Bond Fund is near multi-year highs, but a large trader apparently believes that further upside will be limited.

optionMONSTER systems show that a trader sold 5,000 March 93 calls for the $1.20 yesterday. Open interest in the strike was 1,126 contracts at the beginning of the session, so this is a new position.

The call selling is a bet that the HYG will continue to run into resistance around that $93 level. The options could have been sold naked with an initial bearish bias or traded against long shares as a covered call. (See our Education section)

The HYG rose fractionally yesterday to close at $93.29. The exchange-traded fund bounced off support near $90 three weeks ago. Resistance around $94 has been in place since June 2008, with a four-year high coming in right around that level in mid-September.
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Options Academy: Ron's Risk Calculation--A Real Life Example

It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

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