OptionsHouse

Options Trading News

December 24, 2012  Mon 2:45 AM CT

MCK: SEE CHART GET CHAIN FIND STRATEGIES
McKesson hit an all-time high last week, and now one trader is expecting a sharp move up or down by pharmaceutical-service company.

optionMONSTER systems show that 2,000 May 92.50 puts were bought for the ask price of $2.70 on Friday. This is clearly a new position, as open interest in the strike was just 95 contracts at the beginning of the day. The delta of the options was -0.31, so the total delta of the position is -62,000.

One minute after the puts were bought, 62,000 MCK shares were bought for $97.8807. That would make the position delta-neutral, a long-volatility trade that would profit from a big stock move in either direction. (See our Education section)

MCK finished Friday at $98 even, down 1 percent on the day but up fractionally for the week. Shares have been running higher from support at $86 in the last three months and chalked up a lifetime high of $100 on Tuesday.
Share this article with your friends


Related Stories

MCK

Cramer: Enough about the Fed

April 7, 2015

When will the Fed make its next move? Is this what the majority of market commentary has devolved to? Is this really at the heart of the notion of investing?

Invest Like a Monster - San Diego: June 26-27

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Education & Strategy

Vega

There is another Greek which measures the effects on an option's price buy changing the amount of extrinsic value in the option, and that Greek is Vega...

View more education articles »