OptionsHouse

Options Trading News

December 19, 2013  Thu 9:53 AM CT

IWM: SEE CHART GET CHAIN FIND STRATEGIES
An enormous put sale is looking for a floor in the iShares Russell 2000 Fund.

optionMONSTER systems detected the sale of 30,000 March 105 puts for the bid price of $1.79. Open interest was 16,676 contracts before the trade appeared, clearly showing that this is a new position.

The put seller is taking in a credit of $5.37 million, which would be kept as profit if the IWM stays above $105 through expiration in mid-March. But the trader also carries the risk of having to buy the stock if it falls below that strike price, which means that he or she would be on the hook to purchase $315 million worth of shares. (See our Education section)

The IWM is down 0.39 percent to $112.44 this morning. The exchange-traded fund posted an all-time closing high of $113.51 three weeks ago and was last below $105 in mid-October.
Share this article with your friends


OptionsHouse

Premium Services

Upcoming Webinar:

Using Options For Income

http://bit.ly/1nY1OKA

Jon Najarian and Adam Mesh of Options Wealth Machine discuss a detailed strategy utilizing credit spreads to generate income, and how any level of trader can use this simple trading technique.

Education & Strategy

Sweet Spot Exceptions

As discussed last week, when using the Stock Replacement Strategy to replace a stock position to trade direction, we want to use an option that has very similar characteristics to the stock. We talked about using the deep in-the-money, 80 to 85 delta option that is similar in the Greeks and has relatively little extrinsic value which tends to work against us in stock directional trading.

View more education articles »