Learn the trade here. Make it on tradeMONSTER

Options Trading News

September 12, 2012  Wed 9:56 AM CT

ITUB: SEE CHART GET CHAIN FIND STRATEGIES
One investor expects a whole lot of nothing from Itau Unibanco.

optionMONSTER's tracking systems detected the sale of 2,500 March 16 calls for $1.93 and
2,500 March 16 puts for $1.37. That translates to a net credit of $3.30.

The investor will keep that money if the Brazilian lender closes at $16 on expiration. Gains will erode to the upside or downside, turning to losses below $12.70 and above $19.30. (See our Education section for more on the strategy, which is known as a short straddle.)

ITUB rose 1.65 percent to $16.68 in morning trading and has lost more than one-fifth of its value in the last six months. The stock has struggled against negative sentiment toward emerging markets as hopes of strong growth have been dashed by weakness in China and the failure of left-leaning politicians to continue pro-market reforms in Brazil.

While shares have rebounded since July, they're been trapped between declining 100- and 200-day moving averages. That could be leading some chart watchers to expect a period of consolidation, which would explain the use of a market-neutral trade such as a short straddle.
Share this article with your friends


Related Stories

ITUB

Notable option trades in equities

October 30, 2014

Nearing the halfway mark in today's session, here are the individual equity names with unusual option activity on optionMONSTER's ActionTracker data system.

ITUB

Brazilian bank draws bullish bet

October 29, 2014

Itau Unibanco has bounced off seven-month lows reached after the Brazilian election, and a large call spread is looking for modest gains by early next year.

Premium Services

Free Webinar Series

The 100K Challenge

Education & Strategy

Anatomy of a butterfly

One of the many esoterically named option strategies is known as a "butterfly." But don't be fooled: Like other advanced...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER