OptionsHouse

Options Trading News

February 22, 2013  Fri 3:16 AM CT

OIH: SEE CHART GET CHAIN FIND STRATEGIES
The Market Vectors Oil Services Fund saw a bearish combination trade as shares fell yesterday.

A trader bought 15,000 April 39 puts for the ask price of $0.55 and sold the same number of the April 47 calls for their bid price of $0.10, according to optionMONSTER systems. The volume was multiples of the previous open interest at each strike, clearly indicating new positioning.

This combination trade cost $0.45 to open, plus margin requirements. It could be an outright bearish play or a protective collar on a long stock position. (See our Education section)

The OIH was down 1.36 percent to close at $42.77 after hitting an intraday low of $42.26. The exchange-traded fund was near support at $36 three months ago but last week broke above $45, its highest level in a year.

More than 65,000 OIH options changed hands yesterday, compared to the daily average of 8,700 in 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 »