OptionsHouse

Options Trading News

September 22, 2016  Thu 8:22 AM CT

KBE: SEE CHART GET CHAIN FIND STRATEGIES

A large position is counting on the uptrend to continue in the SPDR Bank Fund.

optionMONSTER's tracking program detected the purchase of 10,000 October 33 calls in one print for $1 yesterday. This is clearly a new position, as open interest in the strike was a mere 22 contracts before the trade occurred.

Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)

KBE rose 0.5 percent to $41.91 yesterday and is up 6 percent in the last three months. Total calls outnumbered puts by a bullish 20-to-1 ratio.

Share this article with your friends


OptionsHouse

Premium Services

Education & Strategy

Using spreads to minimize risk

Last week we discussed the risk vs reward profile of a debit call spread in Wells Fargo (WFC). This week we will run thru the risk vs reward of selling a credit put spread to achieve the same exposure of that debit call spread.

View more education articles »