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August 3, 2012  Fri 12:20 PM CT

GT: SEE CHART GET CHAIN FIND STRATEGIES
Goodyear Tire & Rubber spiked higher after reporting strong earnings earlier this week, and one trader is betting that the stock will hold current levels.

GT is up 1.29 percent to $11.17 in afternoon trading. Leading up to Tuesday's quarterly results, shares of the tire manufacturer had fallen to support levels under $10 going back at least to last October.

optionMONSTER's systems detected the sale of 23,000 September 11 puts in less than a minute for $0.60. Open interest in the strike was a mere 164 contracts at the beginning of the day, so this is clearly a new position.

The put selling represents a belief that the stock will be above the $11 strike price at expiration in six weeks. If GT is above this level at that time, the trader faces the requirement of buying the shares at an effective price of $10.40. (See our Education section)

The trade accounted for almost all the option activity in Goodyear today, pushing the total volume to nearly 5 times its daily average for the last month.
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Options Academy: Ron's Risk Calculation--A Real Life Example

It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

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