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May 9, 2013  Thu 2:45 AM CT

TROX: SEE CHART GET CHAIN FIND STRATEGIES
A large call spread dominated yesterday's option activity in Tronox before the global titanium producer reported first-quarter results after the close.

optionMONSTER systems show that a trader bought 9,500 November 22.50 calls for $2.15 and sold the same number of November 30 calls for $0.45.

This vertical spread cost the trader $1.70, which is the amount at risk if TROX remains below $22.50 through mid-November. The maximum gain would be $5.80 if shares are at or above $30 at that expiration. (See our Education section)

TROX gained 2.48 percent to close at $21.88 yesterday, bringing it back up to resistance that has been in place since October. Shares were last above $30 in June, then fell below $15 into December.

The stock apparently did not move in after-hours trading. Management is scheduled to discuss the earnings report on a conference call today at 8:30 a.m. ET.

More than 24,000 TROX options traded on the day, compared to a daily average of just 384 in the last month.

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It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

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