Market News

October 12, 2016  Wed 7:47 AM CT

A trader is positioning for more declines in Vodafone next year.

optionMONSTER's monitoring program shows that 2,136 January 28 puts were sold for $1.56 while 2,136 April 27 puts were purchased for $1.54 yesterday. Volume was below open interest in the January contracts, indicating that a bearish position was rolled forward by three months to a lower strike.

Long puts lock in the price where a stock can be sold, so they make money if shares decline. Investors use them to hedge long positions or to speculate on a drop. (See our Education section)

VOD fell 1.45 percent to $27.85 yesterday and is down 9 percent in the last three months. The U.K. mobile-telecom carrier is scheduled to announce quarterly results in pre-market hours on Nov. 15.

Overall option volume in the name was twice its daily average yesterday. Puts outnumbered calls by a bearish 3-to-1 ratio.

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Four-Part Edition: Cash-Secured Puts, Covered Calls, Stock Replacement Calls, and Protective Puts

We are finishing this year's editions of Advantage Point Newsletters with a "best of" review of the simple options strategies that should be the basic foundation for any investor.

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