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February 12, 2013  Tue 10:48 AM CT

FIO: SEE CHART GET CHAIN FIND STRATEGIES
Shares of Fusion-IO are on pace for a new closing low, and one trader is looking for more declines in the data-storage and memory company.

optionMONSTER's Depth Charge system shows that a put spread makes up most of the 7,000 FIO options that trade. A trader sold 2,000 March 19 puts for the bid price of $2.25 against open interest of 2,905. A few minutes later a block of 3,100 March 17 puts was bought for the ask price of $0.95 in volume that was above the previous open interest of 1,121, so that is a new position.

This appears to be a trader is rolling a position lower, selling the in-the-money March 19 puts and buying more of the at-the-money March 17 puts for further downside exposure while taking some money off the table. (See our Education section)

FIO is down 1.74 percent to $16.95, which would be a new closing low. Shares gapped down from $20 at the end of last month on earnings and have lost half of their value since early October.
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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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