OptionsHouse

Options Trading News

September 30, 2011  Fri 12:21 PM CT

IP: SEE CHART GET CHAIN FIND STRATEGIES
Traders are selling puts in International Paper for the second day in a row even as the stock takes another leg down.

IP is down another 2.65 percent to $23.51 this afternoon. The paper and packaging company is back near its August lows after recovering and bumping into resistance at the $28 level on two occasions earlier this month.

Leading today's option volume are the January 15 puts, which a trader sold 8,000 times for the bid price of $0.48. This was more than twice the previous open interest, so the trade is opening a new position.

Less than two minutes after those puts were sold, the largest block of IP stock traded as 80,000 shares were sold short for $23.35. Given that the delta of the puts is 0.10, this would hedge the price sensitivity of the position, making it more of a short volatility play as opposed to voicing any view on the direction of the stock.

Overall calls in the name outnumber puts by 8 to 1 so far today. The activity follows the sale of 5,000 January 2013 23 puts a day earlier in an apparent bet that the stock will stay above that $23 strike price.

The company is scheduled to report third-quarter earnings on Oct. 27.
Share this article with your friends


Invest Like a Monster - San Diego: June 26-27

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Archived Webinar

Education & Strategy

Long synthetic call

Long and short Synthetic stock are two of the six basic synthetic positions that exist. Number three on our list is the Synthetic Long Call...

View more education articles »