Market News

October 17, 2016  Mon 5:16 AM CT

A short-term trade is betting that upside potential will be limited in Harley-Davidson after it reports earnings tomorrow.

optionMONSTER's tracking programs detected the sale of 3,000 October 51 calls in one print for $1.50 on Friday. This is clearly a new position, as open interest in the strike was a mere 21 contracts before the trade occurred.

Short calls generate income and lock in the price where a stock must be sold. The trade is usually done in conjunction with long shares in a covered-call strategy, reflecting a belief that gains will be limited through expiration. (See our Education section)

HOG fell 1.17 percent to $49.83 on Friday but is up 5 percent in the last three months. The motorcycle icon is scheduled to announce quarterly numbers before the market opent tomorrow.

Overall option volume in the name was about average in HOG on Friday.

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