OptionsHouse

Options Trading News

September 17, 2012  Mon 11:02 AM CT

EMC: SEE CHART GET CHAIN FIND STRATEGIES
A long-term spread is positioning for a limited pop in EMC.

EMC is down fractionally today, trading at $27.65. Friday's close was the highest since the start of May for the data-storage company.

A trader bought 5,600 of the January 2014 30 puts for $5.26 and, at the same time, sold the same number of the January 2013 30 puts for $3.17. The volume at each strikes was more than open interest, so this is a new calendar spread.

The position is designed to profit from the increased time decay of the nearer-term options. The trader is essentially betting that EMC will be around $30 at the start of next year.

The trade cost $2.09, which is at risk if shares move too far in either direction away from $30. (See our Education section)
Share this article with your friends


Invest Like a Monster - San Diego: June 26-27

Premium Services

Education & Strategy

Introduction to Synthetics

"Synthetics" is the name given to the relationship of two separate positions, constructed differently, that have the same exact risk and reward at each and every price level. They say that there is more than one way to skin a cat...well, there is always more than one way to create an option position...

View more education articles »