Options Trading News

October 14, 2011  Fri 11:55 AM CT

Grand Canyon Education has fought back to a key level, but traders apparently don't think that there is much upside left.

optionMONSTER's monitoring systems detected the sale of about 2,600 December 20 calls for $0.35 against open interest of just 49 contracts. The trade pushed total options volume in the for-profit education stock to 16 times greater than average.

LOPE is down 3.54 percent to $16.37 in afternoon trading. It lost more than half its value between April 2010 and May 2011 but has been grinding higher since then. The shares are now back in the $16-$18 range that offered support last year and resistance this year.

The last time it tried to challenge $18 was on Aug. 5, when a strong earnings report caused the stock to gap higher, but sellers stepped in and quickly drove it back to earth. The next earnings report is scheduled for the afternoon of Nov. 7.

Shareholders often write calls when they think upside is limited, letting them earn income to reduce their cost basis. Today's call selling accounts for all the options activity in the name so far, with not a single put crossing our screens.
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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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