OptionsHouse

Options Trading News

January 10, 2014  Fri 3:16 AM CT

WETF: SEE CHART GET CHAIN FIND STRATEGIES
A large put trade is positioning for a potential pullback in WisdomTree Investments.

optionMONSTER's Depth Charge system shows that a trader bought 5,000 March 17.50 puts for the ask price of $1.45 and sold 10,000 March 15 puts for the bid price of $0.45. This is clearly new activity, as previous open interest at each strike was below 900 contracts.

The trade is a ratio spread designed to profit from a limited drop in shares of the financial company, which operates exchange-traded funds. The maximum profit would come with the stock around $15 at expiration in mid-March, but below that level the trader would be on the hook to buy shares. (See our Education section)

WETF rose 0.63 percent yesterday to close at $17.46. The stock reached an all-time high of $18.22 on Tuesday but was down at $15 only a month ago.

Yesterday's put spread made up the bulk of WETF's total volume of 15,709 options, which is 10 times its daily average for the last month.
Share this article with your friends


OptionsHouse

Premium Services

Upcoming Webinar:

Using Options For Income

http://bit.ly/1nY1OKA

Jon Najarian and Adam Mesh of Options Wealth Machine discuss a detailed strategy utilizing credit spreads to generate income, and how any level of trader can use this simple trading technique.

Education & Strategy

Sweet Spot Exceptions

As discussed last week, when using the Stock Replacement Strategy to replace a stock position to trade direction, we want to use an option that has very similar characteristics to the stock. We talked about using the deep in-the-money, 80 to 85 delta option that is similar in the Greeks and has relatively little extrinsic value which tends to work against us in stock directional trading.

View more education articles »