Learn the trade here. Make it on tradeMONSTER

Options Trading News

July 11, 2013  Thu 2:45 AM CT

LINE: SEE CHART GET CHAIN FIND STRATEGIES
A bullish call spread led the option trade in Linn Energy yesterday as shares continued to recover lost ground.

A trader bought 2,200 January 25 calls for the ask price of $4.30 and, at the same time, sold 4,400 January 30 calls for the bid price of $2, according to optionMONSTER's Heat Seeker tracking system.  

This strategy, known as a ratio spread because twice as many contracts were sold than bought, costs the trader just $0.30, which is the amount at risk if LINE is anywhere below $25 at expiration in mid-January. The maximum gain would come if shares are around $30 at that time, but above that level the trader would be effectively short shares. (See our Education section)

LINE gained 2.5 percent yesterday to close at $26.64. Shares tumbled last week after it was announced that the company was being investigated for possible violations of securities laws. The stock hit a low of $20.25 on Friday after trading above $33 at the start of that week.
Share this article with your friends


Related Stories

LINE

Cramer: The bear is on the move

October 15, 2014

Put simply, dividends aren't defending this market. At least not yet. And until they do, buying this dip may be harder than you think.

Premium Services

Free Webinars

Make Money in a Volatile Market

Education & Strategy

Vexed by the VIX

Many people probably don't know that the calculation changed for the CBOE Volatility Index this week, but it's worth discussing...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER