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January 3, 2012  Tue 1:48 AM CT

Shares of Apollo Group enter the New Year just off last year's high, while a combination trade in the near-term options dominated the option activity on the last day of 2011.

APOL finished Friday down 0.39 percent at $53.87, not far from the 52-week closing high of $54.53 set on Dec. 27. The education company has been trending higher since early October, when the stock bounced off support around $38.

Option volume was expectedly light for most of the market, but not for APOL. A trader bought 5,000 January 60 calls for the ask price of $0.44 and sold 10,000 January 48 puts for the bid price of $0.62. The open interest at both strikes was less than 2,000, so both sides of the trade were opening transactions with a decidedly bullish bias.

Less than a minute later, 245,000 Apollo shares sold for $53.9171. If the stock is tied to the option trade, the overall position would remain bullish as long as APOL continues to push higher. But this combination of stock and options would also benefit from time decay if APOL drifts to the lower $48 strike price, though below that level it still has considerable downside risk.
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