Huge call sale targets Dow Jones ETF
Chris McKhann | firstname.lastname@example.org
More than 52,000 DIA options have traded in total, compared to a daily average of around 35,000. optionMONSTER systems show that a trader sold 10,920 January 133 calls for the bid price of $1.52 against previous open interest of 7,550 contracts, so this is a new position.
The call selling isn't tied to any trading in the underlying shares that we can see today, but it is likley they they were traded against a previously established long position. That would create a covered call strategy, which would be bullish up to the $133 strike price but not beyond. (See our Education section)
The DIA is down 1.23 percent to $131.14 in early afternoon trading. The exchange-traded fund bounced off support at $125 a month ago and tested resistance around $134 earlier this week.