OptionsHouse

Options Trading News

March 21, 2013  Thu 10:13 AM CT

ARMH: SEE CHART GET CHAIN FIND STRATEGIES
ARM Holdings is falling sharply this morning, and one option trader is looking for more volatility in the semiconductor name.

optionMONSTER systems show that volume of 4,500 contracts is already triple its full-session average. A trader bought 3,750 April 38 puts for the ask price of $0.65 in volume that was 10 times the previous open interest, so this is a clearly a new position.

A minute earlier, the biggest block of ARMH stock traded as 100,000 shares were bought for $40.10. The combination of stock and options creates an overall position that is delta-neutral and long volatility, meaning that the trader is anticipating a big move up or down in the stock. (See our Education section)

ARMH is down 2.86 percent to $40.02 this morning. That is the U.K.-based chip maker's lowest level since the middle of January and represents support. Shares were hit a 52-week high above $40 at the start of the month. 
Share this article with your friends


OptionsHouse

Premium Services

Education & Strategy

Using spreads to minimize risk

Last week we discussed the risk vs reward profile of a debit call spread in Wells Fargo (WFC). This week we will run thru the risk vs reward of selling a credit put spread to achieve the same exposure of that debit call spread.

View more education articles »