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November 13, 2012  Tue 2:14 AM CT

BK: SEE CHART GET CHAIN FIND STRATEGIES
The Bank of New York Mellon fell after hitting a 52-week high last week, but traders apparently believe that further losses will be limited.

optionMONSTER's tracking systems detected the sale of 2,107 March 21 puts for $0.56 and 1,415 March 22 puts for $0.82. The volume was well above respective open interest of 313 and 235 contracts, indicating new positions.
 
BK was down fractionally yesterday at $24.07. Shares of the financial-services company hit a 52-week high of $25.35 on Election Day but gapped lower with the rest of the market a session later. The stock has been trading close to $24 since then.

Yesterday's put sellers are looking for the stock to be above $21 or $22 at expiration in mid-March. The traders face the obligation to buy shares if they are below those levels at that time. (See our Education section)
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Market Level Making You Nervous, Huh? Part 3

In last week's article, we discussed how important the extra cash you save by using the Stock Replacement Strategy over buying the actual stock is! That extra cash in our account instead of being unnecessarily tied up in a stock position allows us to buy the puts we would need to protect our downside in the case of a major sell-off.

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