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May 4, 2012  Fri 11:52 AM CT

AVP: SEE CHART GET CHAIN FIND STRATEGIES
A trader is betting on limited upside in Avon Products as the cosmetics icon gives up some of its gains from yesterday.

AVP is down 3.19 percent to 20.33 this afternoon. Yesterday it was below $20 before running as high as $22.71 and then closing at $21 even.

optionMONSTER's systems detected the sale of 35,000 July 22 calls, including two prints of 24,700 and 10,000 that traded seconds apart for the bid price of $1.15. The volume was more than 5 times the previous open interest, so this is a new opening position.

This call selling represents a belief that AVP will not return to yesterday's highs. The options were probably traded against long stock as a covered call position, which would be bullish up to the $22 strike price but surrender any upside in the shares beyond that. (See our Education section)
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So far, my articles have taken you through a logical progression of option theory and fundamental concepts of options. As of yet, I have not mentioned a single strategy and for a good reason! The actual application of a strategy should come AFTER you learn about the option product itself.

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