Options Trading News

August 2, 2013  Fri 4:14 AM CT

Intrepid Potash is down big in recent sessions, and traders are worried about further downside.

optionMONSTER's Depth Charge monitoring system detected the purchase of more than 11,000 December 11 puts, most of which priced for $0.80 to $0.95. Volume was more than 90 times the previous open interest at the strike, indicating that new positions were initiated.

These puts ensure a minimum selling price in the fertilizer stock, letting investors protect long positions against drops or speculate on further declines. (See our Education section)

IPI hit an all-time low of $12.04 yesterday, before bouncing and closing up 2.27 percent to $13.07. It cratered 29 percent on Wednesday after Russia's Uralkali withdrew from a potash cartel, threatening to send prices spiraling lower. Other companies in the industry also tanked.

Overall option volume was 16 times greater than average in the session. Puts accounted for a bearish three-quarters of the total.
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The covered call and unhedged risk

I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

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