Options Trading News

November 19, 2013  Tue 9:54 AM CT

A large trader is betting that Fastenal will see more volatility in coming months.

More than 6,300 FAST options have change hands today, 6 times its daily average for the last month. Almost all of that action is in one strike.

optionMONSTER's Heat Seeker system detected the purchase of 5,000 February 50 calls for $1.20, with prices rising in subsequent smaller prints. This is clearly a new position as previous open interest at that strike was just 1,173 contracts. (See our Education section)

Just after the calls were bought, the biggest block of FAST stock traded as 160,000 shares were sold for $46.92. The combination of sold shares and long calls creates a delta-neutral play that is long volatility.

FAST is up fractionally to $46.96 this morning. The construction-supply company bounced off support at $44 in late August and hit long-term resistance at $52 two weeks ago.
Share this article with your friends


Premium Services

Education & Strategy

The art of trading

As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

View more education articles »