Options Trading News

May 2, 2012  Wed 10:16 AM CT

Intel is just off a four-year high it reached yesterday, but a huge put trade dominates option activity in the chip giant today.  

INTC is down fractionally at $28.87 this morning after hitting $29.05 at yesterday, its highest price since 2004. The stock is up 50 percent since its 52-week low set in August.

Two of the largest option prints of the day come in INTC puts. A trader bought 20,000 June 29 puts for $1.02 and sold 20,000 of the May 28 puts for $0.28, according to optionMONSTER's Depth Charge system. The volume at that May strike was less than open interest.

It appears that the trader is rolling the put position out from May to June as we close in on the last two weeks before expiration, when time decay is at its worst. The position may be an outright bearish position, as the trader moves into the in-the-money puts. (See our Education section)

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The covered call and unhedged risk

I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

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