Options Trading News

April 19, 2013  Fri 9:12 AM CT

A trader is looking for higher volatility in CenturyLink, which has regained about half of its losses from a gap down in February on quarterly results.

optionMONSTER systems show that more than 12,000 May 35 puts have traded in volume far above the strike's open interest of 892 contracts, clearly indicating new activity. One block of 8,056 was bought for the ask price of $0.40.

At exactly the same time, a block of 100,700 CTL shares was purchased for $37.19. The combination of stock and options creates a long-volatility position. (See our Education section)

CTL is up 0.54 percent to $37.06. The telecom carrier gapped down from above $41 to below $33 on its February earnings announcement and has been slowly regaining some of that ground since then.

More than 14,000 CTL options have changed hands already this morning, about triple its daily average in the last month.
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The art of trading

As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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