Options Trading News

January 11, 2013  Fri 1:47 AM CT

A large trade is looking for higher volatility in Swiss financial firm UBS, which finished yesterday at a new 52-week high.

optionMONSTER systems show that a block of 6,050 June 15 puts was bought for the ask price of $0.65. Open interest in the strike was just 18 contracts at the start of the session, so this is clearly a new position.

Less than a minute later, 151,250 UBS shares were bought for $17.15. The combination of the stock and options created a delta-neutral position that is betting on greater volatility, rather than a particular directional move shares.

UBS closed at $17.15, up 2.02 percent on the day and at an 18-month high. Shares were below $10 at their lows in July.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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