OptionsHouse

Options Trading News

November 8, 2013  Fri 12:17 PM CT

HTZ: SEE CHART GET CHAIN FIND STRATEGIES
On investor is is looking for a limited bounce in Hertz as it trades at seven-month lows.

optionMONSTER's Heat Seeker system shows that a trader bought 1,500 June 20 calls for $3.25 and sold 3,000 June 26 calls for the bid price of $1. The volumes were multiples of their respective open interests, clearly indicating new activity.

The trader paid $1.25 to open this ratio spread, just $0.05 of premium given that the stock was at $21.20 when the trade was placed. (See our Education section)

The maximum gain on the call spread comes if HTZ climbs to $26 by that June expiration. Above that the trader is effectively short shares through the additional calls that were sold.

HTZ is now down 0.47 to $21.27, which would be its lowest close since March if these levels hold for the rest of the afternoon. The car-rental giant dipped below $20 on Tuesday after reporting earnings, but shares were above $27 in mid-September.

Total calls in the name are outnumbering puts by 11 to 1 so far today.
Share this article with your friends


Related Stories

HTZ

Hertz draws call buyers at key level

May 4, 2015

The rental-car giant on Friday broke out of a tight range in place since early March and closed above its 50-day moving average for the first time in two months.

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

Premium Services

Archived Webinar

Education & Strategy

Long synthetic call

Long and short Synthetic stock are two of the six basic synthetic positions that exist. Number three on our list is the Synthetic Long Call...

View more education articles »