Options Trading News

May 4, 2012  Fri 11:52 AM CT

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)
Share this article with your friends

Related Stories


Notable option activity in equities

October 2, 2015

Nearing the halfway mark in today's session, here are the individual equity names with unusual option activity on optionMONSTER's ActionTracker data system.


How the bears are playing Avon

September 11, 2015

The ailing cosmetics firm has lost more than half its value this year amid broad sales declines and weakness in Latin American currencies.


Premium Services

Archived Webinar

Education & Strategy

Options Academy: More on the Covered Call Strategy

Last week, we talked about the Covered Call and the misconceptions that surround it. We spoke about how an investor must realize that the Covered Call is actually a premium collection strategy and not so much a directional one. If an investor can grasp this idea, the investor stands to do a heck of a lot better in the strategy than they currently do.

View more education articles »