Options Trading News

December 19, 2012  Wed 4:45 AM CT

Home Depot has pulled back since starting the month at its high for the year, and one trader is positioning for more potential losses.

More than 5,600 February 60 puts traded in a strong buying pattern yesterday, led by a single print of 3,979 that went for $0.97. The volume was 4 times higher than the strike's open interest of 1,432 contracts at the beginning of the day, indicating these are new purchases.

The option activity wasn't tied to any stock trades identified by our systems yesterday, but the puts could have been bought to protect a long position established earlier. If not, they are making a straight bearish bet that HD will fall roughly 3 percent by expiration on Feb. 15, 11 days before the company reports fourth-quarter earnings. (See our Education section)

HD slipped 0.49 percent yesterday to close at $63 even. Shares of the home-improvement retailer began December by hitting a 52-week high just shy of $66 but then began to falter, though they are still up 50 percent since starting the year around $42.
Share this article with your friends

Related Stories


What's behind Home Depot puts

September 21, 2015

The home-improvement retailer has been range-bound mostly since dropping with the broader market late last month.



The fastest money in the market
View full report »

Premium Services

Archived Webinar

Education & Strategy

The covered call and unhedged risk

I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

View more education articles »